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Forex Flash: Australian and NZ bonds excellent defensive plays – ANZ

By FXstreet.com,  January 16, 2013, 11:30:00 AM EDT

FXstreet.com (Barcelona) - According to the Warren Hogan and Richard Yetsenga of the Global Economics Strategy Team at ANZ, "We think that Australian and NZ bonds are excellent defensive plays, offering expected returns similar to US 10-years without taking on significant duration exposure. In particular, we favor NZ flatteners, which offer attractive roll and carry."

In addition, we like a 1y1y call spread in Australia to take advantage of low volatility amid the uncertain policy landscape as we expect to see reactive policy easing this year. "Credit should do particularly well again, despite what is likely to be a more idiosyncratic bond return environment and we are positioning for this via the Australian semi-government bond market, where spreads are still high and roll and carry are positive." they suggest.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Forex and Currencies

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