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Steepeners:no great catch

Credit curve steepener trades using constant maturity swaps have emerged as an innovative way to take advantage of the much-anticipated rise in credit volatility. Given the recent widening of credit spreads, are these products set for lift-off?

Like their global counterparts, Asian investors are looking for cheap ways to exploit the potential and broadly forecasted widening in future credit spreads. One way to meet this objective is to use constant maturity credit default swaps (CMCDSs), which are designed to express views that the credit curve is likely to steepen in the future.

With CMCDS structures, investors can profit from credit

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