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Winds of Change - High Quality Credit Spreads

FICC Podcasts April 21, 2021
FICC Podcasts April 21, 2021

 

Dan Krieter and Dan Belton discuss recent developments regarding three pivotal areas of change in fixed income and how they impact spreads markets, including regulation and a move towards sustainability in finance.


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About Macro Horizons
BMO's Fixed Income, Currencies, and Commodities (FICC) Macro Strategy group led by Margaret Kerins and other special guests provide weekly and monthly updates on the FICC markets through three Macro Horizons channels; US Rates - The Week Ahead, Monthly Roundtable and High Quality Credit Spreads.

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Dan Krieter:

Hello, and welcome to Macro Horizons High Quality Spreads for the week of April 21st, The Winds of Change. I'm your host Dan Krieter, here with Dan Belton, as we discuss recent developments regarding three pivotal areas of change in fixed income, and how they impact our markets, including regulation and a move towards sustainability and finance.

Dan Krieter:

Each week, we offer our view on credit spreads. Ranging from the highest quality sectors such as agencies and SSAs, to investment grade corporates. We also focus on US dollar swap spreads and all the factors that entails including funding markets, cross currency markets, and the transition from LIBOR to SOFR.

Dan Krieter:

The topics that come up most frequently in conversations with clients and listeners form the basis for each episode, so please don't hesitate to reach out to us with questions or topics you would like to hear discussed. We can be found on Bloomberg, or email directly at dan.krieter, K-R-I-E-T-E-R@bmo.com. We value and greatly appreciate your input.

Speaker 2:

The views expressed here are those of the participants and not those of BMO capital markets, it's affiliates or subsidiaries.

Dan Krieter:

Well Dan, I think theme that we really talked about the most in our podcast last week was how credit spreads have really settled into a range here and we weren't seeing much volatility at all. And, looking week over week, it's true that credit spreads haven't moved much on an absolute basis since last week. But, looking at just the week over week change, masks a little bit more volatility we've had in the past week.

Dan Belton:

Yeah, you're right. Spreads are still in that same range that they've been in this year, which is that 87 to 100 basis point area. Spreads are now towards the lower end of that range, but firmly within that range. We've traded in a four to five basis point range over the past week, we've moved a little bit wider.

Dan Belton:

But I think the real story over the past week is that supply has turned from pretty light in the first half of April to extraordinarily heavy over the past week. Most of that supply has been from financials.

Dan Krieter:

The financial issuance has certainly been the headline story of the past week and we'll touch on it. But, I think you made a key point there talking about the four to five basis points range in spreads. We've gone from seeing spreads hardly moving to at least it didn't narrow down. It actually made a new low, mid last week. 87 basis points, a new post cyclical low, and we've backed up about four basis points in the broad index since then. We are seeing some volatility and I think that volatility really underscores two key points to our view. The first is, that there just really isn't a significant amount of upside and credit spreads, at the moment. And we've now seen broad IGE spreads bounce off this 87-88 basis point level four times now. It's just so much optimism has already baked in.

Dan Krieter:

You're probably going to have to see more tangible evidence of a very, very strong economic reopening to see further upward potential in credit spreads. And secondly, the point that the recent volatility also underscores is the importance of technicals. I mentioned last week, we touched a new cyclical low and perhaps spreads grinding narrower wasn't a big surprise. In fact, that's what we thought was most likely in the near term, just giving some improving technicals around corporate supply falling and a peak in Treasury yields and actually a drift lower from the highest seen just a few weeks back in Treasury. You get those two technical factors improving. We get spreads grinding narrower. That all changed late last week though, when financial issuance picked up sharply a record deal from JP Morgan, which I think that record said for all of one day before Bank of America broke that record again.

Dan Krieter:

And, I think that financial supply can sort of change the narrative around the technicals in the IGE market. Not only is corporate supply now returned to that really, really fast pace that we got used to in Q1, but it also recasts the rally that we were talking about during last week's episode of Treasures. Where we saw Treasure's intraday reached down to 153, maybe that wasn't some great rethink of the reflation trade. Rather, maybe it had more to do with technical factors behind not only heavy SSA supply, but also this very, very large financial issuance we got late last week and into early this week. So my question for you, Dan, is with that in mind, what's driving this issuance from financials and is it going to continue?

Dan Belton:

Yes. I think there's a strong case to be made that this is related to the SLR exemption expiration. So, many listeners might recall that the SLR exemption expired at the end of March, and that meant that treasuries and reserves on bank balance sheets started to count against the supplementary leverage ratio. And, this is particularly an issue for the big banks, but as the Fed allowed that rule to expire, they also hinted at a permanent change to the rule that would be forthcoming.

Dan Belton:

Now we haven't gotten any clarity on exactly what that rule might be, whether it's going to exempt just reserves going forward or Treasuries and reserves or some other mix of regulatory relief that's coming. But, I think given this uncertainty banks about to raise additional capital while they wait for more clarity on this rule. So, in order to become more compliant with the supplementary leverage ratio, banks have essentially two options. They can either shrink by shedding some reserves or Treasuries or other assets, or they can raise more capital. And, while there's a sort of negative ROI proposition with raising unsecured funding in order to finance Treasury and reserve positions, I think given the uncertainty and given the potential for a longer term remedy to this SLR ratio, there's potential to think that raising cash is the prudent thing to do at least in the near term until we get more clarity.

Dan Krieter:

You make the key point about the negative ARB there, and that's why many analysts on the street ourselves included discounted the possibility that there was going to be a big capital raised by the banks as a result of SLR. It just doesn't appear to be profitable, but when you look at what the Fed ultimately did allow the exemption to expire, but then hinted a more long lasting solution in the near future that sort of changes the math. What's more expensive, running that negative ARB for a little bit with more capital or paying full bid-ask on basically a treasury portfolio worth tens of billions, if not more? And by that, what I mean is, if a bank needs to improve its SLR through asset sales, no, it would have to sell a significant portion of its assets, raise its SLR, and then when those assets become exempt again, buy them all back again.

Dan Krieter:

So, it's this halfway in-between period of time where maybe just raising more capital is the easiest most cost-effective way of doing this. And, I think the proof's in the pudding here. That's what we're seeing, banks increasing the funding, record deals really on the first day after the SLR exemption expired when factoring earnings release blackouts. So, I think there are a few important takeaways from this. Let's focus in the very near term. I think the most direct impact and very heavy financial supply has been extreme, downward pressure on swap spreads as they hedge those big deals. We've seen that combined with also extremely heavy SSA supply. I think we talked about that last week, we've seen very heavy SSA supply and these two sources of issuance that are both swapped have put significant downward pressure on swap spreads. So, the point that they are now at the bottom of the range that they've traded for the past three months. So I think, looking at the fact that fundamentals for swap spreads really haven't changed.

Dan Krieter:

We've just seen a very strong tactical driver push them down to the bottom of the range, looking at swap spread wideners here, make some sense as that issuance potentially starts to fade with most of the financials now in the market. What's your read on the near term impact on credit spreads here, Dan?

Dan Belton:

I think with credit spreads, the answer's not as clear as it is with swap spreads resulting from this heavier issuance. We continue to see this push-pull dynamic where fundamentals are very strong, but we're not going to get increased clarity on the fundamental outlook until maybe later this quarter, third quarter at the earliest. And then, technicals have once again proven to be pretty heavy and weighing on spreads. So, I think we're going to see continued range-bound trading and credit spreads. And, I think investors are going to be wise to play that range, but that's going to be most of the dynamic going forward. I think for at least the rest of the second quarter.

Dan Krieter:

I'm looking a bit further out, given an expectation that this funding need for banks is going to end up being temporary once the Fed unveils whatever their long-term SLR solution is. We could come to see a scenario where banks are modestly overfunded at some point later in the year, and maybe even not much later in the year. So, what that means is, this heavy supply from banks now could mean less supply in the future, or maybe perhaps likely some share repurchases by banks that are now once again allowed by the Federal Reserve, after they were temporarily suspended as a result of COVID. So, it wouldn't surprise me at all to see some bank share buybacks after the Fed's announcement.

Dan Krieter:

So, I do think that's been the biggest issue in spread markets over the past week. And, I want to also draw our attention to another issue this time in the money market space, not one we typically follow, but Bank of America certainly made waves a couple of days ago, when they brought the first ever floating rate note type to the Bloomberg short-term bank yield index BSBY or Bisbee, as we will refer to it going forward.

Dan Krieter:

Bank of America brought FRN in a billion dollars in size. That came as a big surprise to me, a full billion tied to Bisbee. And, this has ramifications for the future of Benchmark Perform here in the US, but why don't we start by looking at the issue itself. Dan, what did Bank of America issue and how did it stack up to comparable maturity securities?

Dan Belton:

So, Bank of America's Bisbee Floater announced on Monday was issued at a spread of 18 basis points to the one month tenor of Bisbee. In that one month tenor on Monday fixed at about eight and a half basis points. So, that gives an all-in rate of around 26 and a half basis points for this note. For context, we've seen other banks in the market this week raising funding at around 19 to 21 basis points or so, in that six month tenor. So, this definitely came cheap to where Bank of America probably could have funded itself in that tenor, but that's likely to be expected.

Dan Belton:

Remember, Fannie Mae issued the first SOFR floater back in July of 2018, and that also came with considerable concessions. So, I don't view that as very indicative of much with this Bisbee floater. I think what's more important for demand is when and the size and the level at which the next few issues come. And anecdotally, we've heard that there was really strong demand for this floater, potentially an excess of that $1 billion and that money market funds are starting to approve this rate and that there's going to be considerable men for similar products going forward.

Dan Krieter:

And, I think the most remarkable thing, for me at least, has been the speed with which Bisbee has already been adopted in a billion dollar FRN. The index first started being printed in what December? And, didn't really get a bunch of traction until the second half of Q1. And now, already here we are with the billion dollar FRN. I think that just goes to show you that there is significant demand out there for a credit sensitive benchmark. It's something we've talked a lot about, in our previous podcast and written work, that a credit sensitive benchmark served a real purpose in the transition away from LIBOR. And, that SOFR has just not met the needs of many market participants. Even looking just through the lens of a money market fund, you're just investing at a repo rate that's been one basis point now for over a month and already a significant portion of your assets are in repo.

Dan Krieter:

So, do you really want another floating rate tied to repo? And then, looking at it from the perspective of a hedger who used LIBOR to hedge changes in credit. SOFR just didn't do that. We've long thought that there was need for a credit sensitive benchmark, but I'm surprised at how quickly this has happened. So, clearly there's significant demand for it. The question now has to become, frankly, can Bisbee overtake SOFR? In terms of a replacement of LIBOR here in the United States, where that deadline now been pushed in 2023. So, to answer that question, I think there's a couple of things we need to answer. The first is, viability of the benchmark itself. I think at this point, we're comfortable that SOFR is a viable benchmark backed by hundreds of billion dollars of underlying transactions. What about the viability of Bisbee? Do we have any answers there?

Dan Belton:

Yeah, Dan, it's an interesting question. I don't think there's a very clear definitive answer to that. So two weeks ago, Bloomberg put out a statement saying that Bisbee was compliant with the IOSCO benchmark principles and they had an independent accounting firm verify and agree with that statement. But, that's likely where this IOSCO compliance assertion is going to end. We're not going to get any regulator come in and say that Bisbee is or is not compliant with benchmark principles, nor has IOSCO itself likely to opine on this. So, Bisbee is backed by at least $10 billion in transactions each day. Is that enough? It's not really easy to say definitively whether or not it is, but for now we've had Bloomberg assert that it is. We've had at least one of the rating agencies come out and say that it's a suitable benchmark for some money market funds. And I think for now, that's probably good enough. Now down the road, if there's more and more assets tied to this benchmark, will it come under more scrutiny? And that's hard to say, I think it's very possible that's the case.

Dan Krieter:

I think the key point you make there, 10 billion a day, is that enough? I don't know. I can't make the argument that it's enough, but I also can't make the argument that it's not enough. IOSCO standards are perhaps by design, slightly vague. And, when you have a robustness behind the methodology that Bloomberg has for Bisbee and you have an insurance provider like Ernst and Young coming out and saying, "We've looked at all of the tenants of IOSCO's principles for an acceptable benchmark and found Bisbee to be in compliance. And, here's our justification for that thought process." Who's going to come and say, "That's not right." And so, to your point, I don't think we're ever going to get a definitive answer on whether or not this definitely is IOSCO compliant or not. I don't think that's possible. So, when I'm looking at Bisbee and asking, is this a viable benchmark in terms of IOSCO?

Dan Krieter:

I think the answer there is yes. And, I don't think that it will ever be clear in one way or the other, but what we have so far already is enough for me to say that I think this is good enough for the market. And that, that really won't be much of a question going forward, in my opinion. But, obviously we have to knowledge some significant degree of uncertainty there. But, if we assume that that question of viability is answered at this point, now we can move on to the bigger questions of can Bisbee overtake SOFR? I think SOFR certainly has a significant headstart given it's much more developed in both cash and derivatives markets. In fact, Bisbee doesn't have any derivatives markets. I'm sure you could construct an over-the- counter swap. I'm sure it would be very, very expensive.

Dan Krieter:

SOFR has already cleared on that side, and while there is some plans to try and get cleared swaps on Bisbee, we are at least months away from that. Maybe by the end of the year, is the room we're going around. So, that's a significant advantage for SOFR that Bisbee really can't be used in derivatives yet you really can't have a direct hedge there for any cash market product. So, big headstart for SOFR. But, at the same time, there are certainly things people like about Bisbee, more than SOFR. Which you've talked a bit about credit sensitivity forward-looking term rate. And, it seems that Bisbee will be pretty popular among a pretty wide swath of investors.

Dan Belton:

And, one other factor that's popular about Bisbee relative to SOFR is SOFR, like you've mentioned, is traded at one basis point for the last month and change. Bisbee doesn't really carry that same risk of going negative, which would be a pretty significant operational headache for users of SOFR. But, to your question about whether Bisbee can overtake SOFR, I think it's very likely that at least for the next several quarters, we have both of these rates in the market and we have different types of users using each of these rates. Like you mentioned, money market funds seem to be really interested in using Bisbee. I think that's going to be very common, but I think there's still going to be a place for SOFR and that trade off just remains to be seen.

Dan Krieter:

I agree with you. It's almost a certainty at this point. We're going to have more than one index. The question is, which one is going to be used more broadly? And, I think just given where we are right now, a very critical juncture for the LIBOR transition is that we are now going to start getting the loan side and some of the cash market side away from LIBOR for the first time meaningfully. I think the fact that those sectors have lagged so much is why LIBOR got pushed to 2023 in the first place. And, now we have this goal set that there are no more financial contracts referencing LIBOR by the end of this year. We are really now entering this critical juncture and you look at it and say, "All right. So, if I'm a regional bank that's looking at the options available to me and try and decide which benchmark to use for my lending portfolio, now. It seems like Bisbee is the one that I would prefer."

Dan Krieter:

And so, to me that implies that Bisbee might even be the favorite at this point. To be the more broadly used index and not just because it's credit sensitivity, but also, and a key here is it's forward-looking term structure, which after an announcement from ARC about a month ago, ARC told us that they would not be in a position to recommend an administrator for term SOFR by the mid-point of this year. And, it might not come this year at all. And, I think that's a key here, is that now this loan officer, whoever I'm talking about on the cash market side is saying, "I might not have a term SOFR at all. And that's a big, big problem for me." And again, increasing the attractiveness of Bisbee. But, then we have this morning, sort of an announcement out of nowhere from CME saying, that they're going to start publishing term SOFR rates. So, Dan walk us through that announcement and what it means.

Dan Belton:

It's certainly an unexpected announcement, but I think what happened is likely that after the ARC announced that they would not be recommending a term SOFR rate, CME group, who likely responded to the RFP, essentially applying to become the benchmark administrator, decided that they were just going to do it on their own. After all, they are clearing the futures and derivatives that are underlying this term rate. But, it's not clear that this was done in any coordination with the ARC or that it was done in response to this increased support for Bisbee. But, it is important that there is now an official term rate for SOFR. Even if it's not recommended by the regulators, it does exist and it can be used. But Dan, a lot of the shortcomings with respect to SOFR, relative to Bisbee still remain. This term SOFR rate, it is forward looking, but it's not going to be credit sensitive. So, it solves some of the problems, but not all of them.

Dan Krieter:

So, Dan. Let's cut to the chase here and wrap this topic up. I know that you're going to tell me that multiple rates are going to exist and that there's a role to play for all of this very, very large uncertainty and all that. Get all that, I'll concede all that you have to give me one way or the other, which one do you think at this point, if you had to say, which one do you think will have the higher pickup and will serve the larger role in the post-LIBOR world here in the United States?

Dan Belton:

It's a tough question. I think if I had to pick one right now, I would say down the road, eventually it will be Bisbee. But, I want to stress that it will be both rates to some extent.

Dan Krieter:

Yeah, I know I was trying to make you not say that. But, I agree with you. I think Bisbee just makes more sense to a wider range of market participants and some of those viability questions have now been answered. So, I agree with you caveat. It will be multiple rates, but I think that Bisbee may be the bigger of the two. I think the main risk to that view is that regulators do something to stand in the way of Bisbee. Certainly SOFR is the preferred choice of regulators to spend years on it. It is backed by hundreds of billions of dollars of underlying transactions. It is the way the rest of the world is going, now that we know that those rights are going away at the end of 2021. It's certainly the rate that regulators would prefer.

Dan Krieter:

And, I'm certain that regulators will do everything they can to encourage SOFR over Bisbee or some other credit sensitive alternative. But, especially given that they've already come out and said that they're not going to punish banks for using other indices. I don't think regulators would go so far as to outright prevent Bisbee from developing as the primary benchmark, once LIBOR is gone. And, as long as they don't do that, I think that the natural demand for Bisbee, how much sense it makes, it's forward-looking term structure, all of these things will eventually lead to it being larger than SOFR. But, only time will tell them we shall see it will be fun.

Dan Belton:

Dan, to put it very simply, Bisbee is very similar to LIBOR. And, LIBOR was obviously a very popular rate for a lot of users for a lot of different reasons. And so, I think it slots in pretty nicely as a replacement.

Dan Krieter:

We're in agreement there. Okay, Dan. Well, before we wrap up, I want to sort of change topics entirely acknowledging the fact that tomorrow is Earth Day. And, with tomorrow being Earth Day, we know that there's going to be a greater focus on sustainability and finance both tomorrow and the week, as a whole. And, we particularly here at BMO would like to draw attention to initiative that BMO is putting forth tomorrow, that we're calling "Trees From Trades", where for every $1 million in fixed income securities traded tomorrow, on Earth Day, BMO will fund the planting of five new trees. And, for every $1 million in ESG framework labeled fixed income securities BMO will fund the planting of 10 trees. We recognize that sustainability is growing throughout the financial system. And, it has grown in just the past few years, some sort of a niche to a portion of the mainstream fixed income market that continues to permeate the markets in very, very meaningful ways.

Dan Krieter:

And, looking to a future where sustainability factors will be as integrated into the financial system as say, credit ratings are when you're looking at purchasing an individual bond. So, I want to spend just a second here talking about some high level themes in the sustainable finance market and what they mean for going forward. And first, I think the place to start is just talking about supply. Specifically, Q1 supply, which total about 250 billion across all currencies. To put that number into context, that's almost the amount of ESG labeled securities as came in 2019 in its entirety. So, just two years ago, an entire year's worth of supply, we got in the first quarter of this year. And, the market is continuing to evolve. We've seen what used to be just green bonds now become social and sustainability bonds. And that in fact, is now becoming the predominant form of issuance in the SSA market, which often leads in terms of sustainability factors.

Dan Krieter:

It invented green bonds and has been at the forefront this entire time. In just the past year, social and sustainability bonds have grown from a small fraction of SSA ESG bonds to over 80 to 90%. And, where we are on the corporate market right now is that social sustainability bonds represent about 30% of total ESG supply. So, as social and sustainability bonds continue to grow, we're going to see more and more and more issuance. Even new labels are being issued. We're seeing more chatter on transition bond labels or sustainability linked bond issuance. And, we're not going to go sit on this podcast and go through each of them. We just want to look from a high level and talk about how this push towards ESG is continuing to grow and demand is only going to continue to grow. So, even though supply has increased significantly, that longterm story that demand outweigh supply, I think remains true.

Dan Krieter:

And, that's more clearly visible nowhere than in the spreads that investors are willing to pay up for securities with high ESG scores. It's a greenium as we call it, the premium price for green or social and sustainability bonds. And, for the listeners of this podcast, that's probably the issue that is most interesting. So, to answer that question, we carried out a study in both primary and secondary markets looking to investigate for the evidence of greenium. And, Dan, you did the primary market study. I think, centered on the IGE market in the US. Tell us what you found.

Dan Belton:

Yeah, so we looked at new issue US dollar Investment-grade Corporates for evidence of a greenium. We use this market because there's a fairly consistent database of new deals that we've been tracking with estimates of new issue concessions or premiums. And so, we looked at the new issue premium for green bond debt versus the market as a whole. And, we've normalized by subtracting off the market average for the given week or month that the green bond was issued.

Dan Belton:

Because, of course, new issue concessions can trend over time and reflect different characteristics of demand in the broader market. And, what we found was that with increasing consistency, new issue green and new issue social sustainability bonds tended to exhibit premium pricing and primary markets. So, this year on average, green bonds have priced 2.7 basis points tighter to secondary curves than their non-green counterparts. And, then in social sustainability bonds, we observed an average premium of about 4.1 basis points with the caveat that there was a smaller sample size for social sustainability bonds. But, this is pretty strong evidence. And, it's the first time that we've observed a really consistent greenium in US dollar markets.

Dan Krieter:

I did the secondary market study and our secondary market study necessarily had to focus on the SSA market. There's just a lot more liquidity, a lot more reliability in terms of quotations there to try and measure for a greenium. And, I tried to do it across four different currencies. Dollars, Euros, Canadian dollars, and Aussie dollars. And, I guess the high-level takeaway is that all four jurisdictions showed tangible evidence of a greenium. Now, I should caveat that by saying that naturally due to the size of the market, my CAD and Aussie dollar studies were very, very small. So, you may not be able to put a ton of stock in those studies, but my studies in the Euro and the US dollar market consisted of at least 30 securities each. And, for the first time ever in the US dollar market. And, I've done this study for about five years now, at least annually for five years.

Dan Krieter:

And, I've never seen tangible evidence of greenium in the US dollar market until this time. We, for the first time ever over 50% of the securities in my study showed premium pricing in the secondary market. And, Euros, which have displayed some degree of greenium for a couple of years now, about three quarters showed greenium. So, it's what you'd expect, larger evidence in the Euro market, but still now evidence across all currencies. Just going to show you how much the demand for those securities has increased. Both as investors have gotten more comfortable with the labeling process, have gotten more clear on what to expect from issuers and have started to communicate what they would like in more detail, but also the shift in the administration. From the Trump presidency, now to the Biden presidency. Who have already seen the key players in his cabinet, including Treasury Secretary Yellen, who's talking about a lot of green initiatives.

Dan Krieter:

We've seen the Fed start to talk up green things. We've seen green specifically represented in proposals for infrastructure spend. The US was definitely behind the rest of the world in terms of integration of sustainability factors into the financial system. But, I think that we will start to play some catch up here and a greenium showing up in US dollar markets is just another symptom of that. So, we've been saying it for years now, but I really truly believe it.

Dan Krieter:

This push towards sustainability is not some fad. It is going to be part of the financial process in the future. It's going to be fully integrated. And like I said, potentially a sustainability rating or some type of sustainability factor as common as a credit rating is now. And, a podcast is not going to be a sufficient medium to even come close to conveying everything that's going on in those markets. But, we'd be happy to jump on the phone with anyone who would like more detail on it or is interested in just talking about the market as a whole. Here at BMO, is something we are very committed to. And, Dan and I both are happy to have those conversations, if they can be of use. So, please join us in our Trees From Trades program tomorrow. We're very excited about that initiative and Dan, I think that about does it for us. Anything else you want to mention before we wrap up?

Dan Belton:

No, I think that covers it. Thanks for listening. Thanks for listening to Macro Horizons. Please visit us at BMO C M.com/macro horizons. As we aspire to keep our strategy efforts as interactive as possible. We'd love to hear what you thought of today's episode. Please email us at Daniel.Belton, B E L T O N @bmo.com. You can listen to this show and subscribe on Apple Podcasts or your favorite podcast provider. This show is supported by our team here at BMO, including the FICC Macro strategy group and BMO's marketing team. This show has been edited and produced by Puddle Creative.

Speaker 2:

This podcast has been prepared with the assistance of employees of Bank of Montreal, BMO, Nesbitt Burns incorporated, and BMO Capital Markets Corporation. Together, BMO who are involved in fixed income and foreign exchange sales and marketing efforts. Accordingly, it should be considered to be a product of the Fixed Income and Foreign Exchange Businesses generally, and not a research report that reflects the views of disinterested research analysts. Not notwithstanding the foregoing, this podcast should not be construed as an offer or the solicitation of an offer to sell or to buy or subscribe for any particular product or services, including without limitation, any commodities, securities, or other financial instruments. We are not soliciting any specific action based on this podcast. It is for the general information of our clients. It does not constitute a recommendation or suggestion that any investment for strategy referenced here in maybe suitable for you.

Speaker 2:

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Dan Krieter, CFA Director, Fixed Income Strategy
Dan Belton Vice President, Fixed Income Strategy, PHD

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