Swap spreads

October 31st, 2014 9:27 am | by John Jansen |

Swap spreads are mixed today. Two year spreads are unchanged at 21 1/2. Five year spreads are 1/4 tighter at 15. Ten year spreads are 1/4 wider at 14.5 and 30 year spreads are 1/4 wider at – 1.5.

One dealer offered the view that we are very close to levels at which one should establish paid positions. He thinks that corporate issuance between now and Thanksgiving will push spreads a tad tighter and he wants to position for wider spreads on that move.

In his opinion spreads will widen as corporate issuance dries up into year end and will widen if rates continue to push higher as that will bring forth hedging activity by end users (who need to pay).

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