Monday, September 20, 2010

JP Morgans US Fixed Income Markets Weekly Wrap Up: “remain neutral on duration”

US Fixed Income Markets Weekly. Duration supply is likely to remain strong over the near term: corporate supply has been robust, muni supply will likely pick up heading into 4Q, and refi risks persist for mortgages. However, this supply has been met with strong demand, as evidenced by extremely low new issue concessions for high grade. Further FX intervention and QE expansion, while uncertain, represent upside risks to demand. Stay overweight high grade, ABS, cash CMBS and MBS. We remain neutral on duration with a bias to add exposure if yields back up due to near-term supply pressures

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