RBC recently released their 20 favorite trades for 2010. As we previously mentioned, RBC is relatively bullish though they are viewing the upcoming year as two different investment environments. They see overall fundamentals improving and the first half of 2010 serving as a period of “catch-up” for investors. That should change heading into the back half of the year as investors become more defensive. Based on this macro outlook RBC provides their 10 favorite trades for 2010:
- Argentina external debt steepeners (Long Boden 2012’s / Short US$ 2033 Discounts)
Actionable only for sophisticated investors with foreign access. The Argentine holdout debt restructuring is likely to conclude in 2010. The holdout-debt-swap is likely to result in underperformance of the long end of the curve, given that most of the resulting debt is expected to be issued in discounts.
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