External broker reports(aggregated public sources), Nordea

Nordea

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External broker reports(aggregated public sources)

Macroeconomics

<ul><li>Tighter German asset swap spreads were a high conviction normalisation trade for many PMs going into the year, but it was supposed to take years.</li><li>Afterall, ECB QT is only just getting started with the exception of the TLTROs for which very few govies were used as collateral.</li><li>Asset swap spreads were highly correlated with credit spreads on the other hand, which led many – including us – to recommend wideners for most of the year as a tail risk hedge, but instead setting up for stop-loss taking spreads the last leg tighter over the recent month.Chart 1.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Tighter German asset swap spreads were a high conviction normalisation trade for many PMs going into the year, but it was supposed to take years.Afterall, ECB QT is only just getting started with the exception of the TLTROs for which very few govies were used as collateral.Asset swap spreads were highly correlated with credit spreads on the other hand, which led many – including us – to recommend wideners for most of the year as a tail risk hedge, but instead setting up for stop-loss taking spreads the last leg tighter over the recent month.Chart 1.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

EUR Rates: Asset Swap Spreads Tightening