Getting flattened

Cover Story

Constant maturity swap (CMS) steepener products have seen phenomenal growth over the past 18 months, with some parties estimating that more than $50 billion has been sold in one guise or another into the market. Asian and North American investors have predominantly bought US dollar products, some of which were quantoed into local Asian currencies, in 2004 and early 2005. And European investor appetite has been equally voracious as yield-hungry investors snapped up euro-denominated CMS steepeners