Fade the move: long short end $ rates

We believe that the market move is akin to overreaction. There is a compelling opportunity to establish again long position s in the short end of the U.S. yield curve. Specifically, we recommend going long a SFR futures Z4-Z5 spread at -0.93 with a -1. 5 0 target during a 3-month horizon (stop-loss at -0.6 4 ). As a vanilla alternative, we recommend going long on the 2-Year UST ( T 3 1/2 09/30/26 : US91282CLP40 ) at 3.99% . The position -15.5bp carry-rolldown is more than compensated by mark to market gains. We stop losses at 4.15%.