​Weekly Bulletin: May 25 – 29

Dividends were a hot topic this week, with Allianz’s global head of derivatives seeing value in div curve steepeners. Curve steepeners as long out to DEDZ9 appear attractive despite subdued growth expectations in Eurostoxx 50 index dividend futures, noted Eric Boess Thursday. BNP also pointed out the same day Eurostoxx 50 mid-term dividend swaps and five-year CDS was pricing attractively, despite the divergence in dividend yields and bond yields over the last 18 months. This is because SX5E dividend swaps are showing similarities to bonds, leading to a close correlation between mid-term dividends and iTraxx movement, according to BNP. In our U.S. pension fund coverage, a leading southern state-owned U.S. fund is looking to onboard internal volatility control mechanisms via options within the next three years and is also researching the benefits of risk premia and alternative beta products. Also, don’t miss our latest buyside commentary from Julien Messias, deputy managing director and risk manager, at Uncia Asset Management. He’s talking about strategies around dispersion or correlation trading. And don’t miss all the latest in the people and firm’s section.