“Dutch Pension Funds Send Shockwaves Through Euro Swap Market”
November 15, 2023
“Dutch pension funds are plowing cash into long-dated swap contracts, according to strategists, upending one of this year’s most popular trades. The funds, by far the region’s largest with more than €1.5 trillion in assets, are likely bidding up the paper to hedge for growing liabilities, strategists at Citigroup Inc. and Barclays Plc said…
…“These hedges are likely to be positioned in long-end swaps, putting flattening pressure on the €10s20s/10s30s swap curve,” said Aman Bansal, a strategist at Citigroup Inc. in a client note. Citi’s Bansal said the “crowded” positioning in steepeners helped exacerbate last week’s moves as investors rushed for exit due to the impact from pension fund buying.
He added the lack of supply of core cash paper also contributed to the move, with the Netherlands announcing it won’t issue more bonds this year, which limits investment options for funds…”
https://finance.yahoo.com/news/dutch-pension-funds-send-shockwaves-122303989.html