A Review Of Our Current Tactical Trade
This trade mirrors our two highest conviction strategic views in government bond space, overweighting core European government debt and underweighting Japanese government bonds (JGBs). This is a pure monetary policy convergence trade. The European Central Bank (ECB) is done with its rate hiking cycle and the Bank of Japan (BoJ) has already slowly entered a monetary tightening phase as Yield Curve Control (YCC) limits on JGB yields have eased.
