Brexit: The dog that didn’t bite rate spread products – TDS

Gennadiy Goldberg, US Rates Strategist at TDS, suggests that there is little evidence of a sustained hit to investor confidence in the rate spread product space, with the sector rapidly retracing its post-Brexit widening move.

Key Quotes 

“We expect further performance to be supported by accommodative global central banks and a persistent global hunt for yield.

Despite tighter spreads in the sector, we continue to like carry and roll in the 4-5yr GSE/SSA space, further compression between 5yr GSE and SSA spreads, and swapping 2yr EUR SSAs into USD to enhance spread pickup.”