Hedging costs could make US fertile ground for euro investors

By Ross Lancaster
16 Jul 2020

Favourable moves in the cross-currency basis swap and rates markets have created opportunities for European investors to play in the US fixed income markets, said Amundi investors this week.

Cross-currency basis swap markets have stabilised since mid-March, when investors’ rush for dollars led to big dislocations in the market. 

The effects of that volatility created some relative value opportunities. Some European insurance companies made a profit from buying up cheap sterling bonds and then swapping them back to ...

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