Commodity Watch: Alternatives to betting directly on the curve
Recently the MOVE and 10 year yield 3m rolling correlation went back to its 2022 levels, so is it time for a cocktail of a rates volatility wrecking ball ala summer 2022 again? Then just short the long end of the curve given the resilient US economy, BoJ’s YCC hikes and a procyclical fiscal policy in the US.
We see this scenario as one in which high duration generation Y & Z assets get hammered and the boomer trade is en vogue.
Chart 1: The Move index and 10 year yield correlation are back to 2022 levels