there is a global component to inflation and if the US is driving that
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high correlation between breakeven and BRL
and markets could become concerned about it earlier if Renzi loses the
with the latest flows pointing to more EUR downside and GBP
to capture both the referendum in Italy and the French
Hanjin shipping troubles and Samsung related issues
perhaps tighter monetary policy and some protectionist’s measures.
and the news flow suggests a referendum by April/May. In a
and the credit remains a solid BB+ fundamentally
vol is cheap vs rates and the skew the least expensive in that sector.
we think vol and skew have room to reprice higher compared to the repricing
and the BoJ defending its JGB yield target. We do
2y2y and 2y1y that the selloff would be largest (75-85bp
% (Volatile markets and USD/CNY at 8.00)
onshore FX swap and forwards would be the next