While we’re on hold for our EU friends, best to revisit the UK term structure.
On the announcement of King's surprise, Oct/6, we alerted clients that the curve would expand, debt prices weaken and to take advantage of that reality.
That is, the lay of the landscape just ahead suddenly took on a different shape. Investors, traders, planners were to navigate that landscape with tools that fit their needs the best.
Pre-announcement, the 10 yr 2.31%, 2 - 10, +171, 2 - 30, +266.
We recommended Oct/14 that clients realize half the gains on this trade and remain with the balance.
Last, 10 yr, 2.60%, 2 - 10, +202, 2 - 30, +292.
We expect progress in Europe and see no reason abandon this position.
Robert Craven
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