Natixis Turned More Neutral on Long-End U.S. Treasurys Before Buyback Plan

Dow Jones
08/20

0604 GMT - Natixis shifted from bearish to more neutral on the long end of the U.S. Treasury curve even before the Treasury's announcement on Wednesday to increase long-end debt buyback volumes, U.S. rates strategist John Briggs says in a note. That said, while the "mechanical increase" in purchases from a supply-demand perspective is helpful, it is not enough to outweigh the longer-term structural headwinds, he says. "Outside of the long end, we continue to recommend longs in the belly [intermediate maturities], reinforced of late by favorable data and the view from Natixis Economics for a Fed that will remain on extended hold," he says. Natixis recommends longs, but also hedged with a long in five-year inflation, Briggs says.

 

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