Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Index-Linked Report: Tap Auction In SGBi3107‏

Published 04/03/2014, 01:27 AM
Updated 05/14/2017, 06:45 AM

The tap auction in the June 2017 bond takes place this week (SGBi3107). We were a bit surprised that the Debt Office decided to tap this bond, as the volume in the new 10Y bond (June 2025) is still below SEK10bn. However, the SGBi3107 bond still trades with a fairly low BEI rate - 1.31%. This corresponds to 1.12% when adjusted for carry/seasonality.

The recent pick-up in the SGBi3107 BEI rate is to a very large extent related to the offsetting effect of the negative carry in March. Chart 1 illustrates how the BEI rate surged in March, but not so much if adjusted for carry. It is revealed from the chart that inflation expectations only moved some 22bp, not 35bp as the screens suggest. Hence, the bond still offers relatively cheap protection for higher inflation up to mid- 2017 and we think we will see relatively good demand for the bond at the auction.

To Read the Entire Report Please Click on the pdf File Below

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.