Hedge funds retreat to sidelines in euro steepeners
Rate hike repricing and stop-losses have gutted positioning in once-dominant 10s30s bet
Recent market moves driven by the ongoing Iran conflict have wiped out most remaining hedge fund positioning in the euro interest rate swap steepener trade – once considered the biggest concentration of risk on the Street.
“Whatever is left of that steepener trade is probably quite residual compared to two weeks ago, where there had been significant risk reduction,” says a head of euro swaps
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