Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious OutperformanceFind Stocks Now

Strategy Sweden: Covered Bonds In Wonderland‏

Published 05/09/2014, 06:35 AM
Updated 05/14/2017, 06:45 AM

Buy 5Y covered bonds ASW - SEB572 ASW at 25bp.

P/L: 17/35bp

Carry/roll down: 1.8bp/m (0.85+0.75)

Despite the performance in covered bonds relative to swaps, we see good reasons to buy/add to already established positions. The environment for covered bonds is just too good to ignore.

1. Interest rates are grinding lower still on low inflation which is forcing central banks to remain supportive. On top of this, interest rate volatility is close to lows and volatility in spreads is also very muted. There is a close relationship between the interest rate volatility and covered bond spreads (see chart below).

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.