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Global debt flows: Steepening trend is tactical; expect a reversion
Seven things learnt from latest flows data 1) The curve steepening theme of late is evident from flows, as there has been some clear underweights set in long end funds. This has been especially of note in government funds, but has also been a feature in corporate funds in the past week. 2) That said, there is also evidence of outflows from money market funds alongside inflows to corporates generally including high yield. Hence there remains firm evidence of players looking to get long spread where possible. 3) It would not surprise us to see another week of long end outflows, but we doubt it becomes a precipitous ... (full story)