Morgan Stanley: inverted swap spreads here for the long term

- Laurie Carver
- 09 Apr 2010

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The inverted swap spread, where medium and long-term government bond yields exceed corresponding swap rates, is set to persist and will prompt a shift in the interest rate hedging strategies of UK pension funds and insurers, according to US bank Morgan Stanley.

The UK 30-year gilt rate has been higher than its swap equivalent since mid-2008 and while the spread as shrunk from its 73-basis-point peak it still stands at about 50bp, according to data from Morgan Stanley. This is a reversal of pre

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