Weekly Foreign Flows to Long-Dated U.S. Credit Surge: Barclays
2021-05-14 13:33:59.208 GMT
By Jack Pitcher
(Bloomberg) — Foreign flows into longer-dated U.S. credit
this week were the highest of the year, potentially due to
expectations that hedge-adjusted yields will increase, according
to Barclays strategists.
* Foreign flows, measured by net dealer-to-affiliate volume,
into the 7-12 year and 12 year+ buckets, are by far the highest
weekly total of the year, Barclays strategists Bradley Rogoff
and Shobhit Gupta wrote in a note Friday
** Those flows are over $2.3 billion for the week as of Friday
morning: Gupta said in separate communication
* A pickup in inflation “should generally drive a steepening in
Treasury curves,” the strategists wrote
** “This should be supportive of overall demand for credit,
especially from overseas buyers as hedge-adjusted yields
increase”
* The flows “should be positive for long-dated debt valuations,
especially BBB credits”
