Hedge funds stopped out on euro steepener amid Iran conflict
Gas price rises flattened 10s30s euro swap spread, forcing investors to cut positions
Hedge funds have been stopped out of euro interest rate swap steepener trades after the conflict in Iran drove European gas prices sharply higher, boosting short-term inflation expectations and pushing the 10-year swap rate above the 30-year rate.
Over the past three years, hedge funds have been betting that the spread between the 10- and 30-year (10s30s) fixed rate on euro interest rate swaps
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