BNP Tips Tapering Strategy Ahead of Bernanke Address

Investors should buy receiver spreads 1x2 and ladders on the iTraxx Main, since such instruments offer a cheap or zero cost way to construct a bullish position ahead of an address by Ben Bernanke, the chairman of the Federal Reserve, at the Federal Open Market Committee on June 19. Bernanke is expected to announce that the Fed will begin tapering monetary policy in the U.S., leading some strategists to take a position on the iTraxx Main that will benefit in the event that the index tightens.