Fed Purchases of 10-Year Treasuries May Outpace Supply, BNP Paribas Says

Investors should bet the difference in yield between five-year and 10-year U.S. Treasuries narrows, because purchases by the Federal Reserve may offset upcoming sales of the longer-dated securities, BNP Paribas SA said.

“There will be less supply than purchases in the seven- to-10-year area,” said Patrick Jacq, a senior fixed-income strategist in Paris. “This should be favorable in that part of the curve and this is why we recommend five-to-10-year flatteners.”

The difference in yield between the two securities widened, or steepened, three basis points to 149 basis points as of 11:15 a.m. in London.

To contact the reporter on this story: Paul Dobson in London at pdobson2@bloomberg.net

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.