UBS AM Is Buying Shorter Europe Debt as Hike Bets Seen Overdone

UBS Asset Management is betting the market has gotten too far ahead of itself positioning for interest-rate hikes by the Bank of England and the European Central Bank.

UBS AM has bought two-year UK gilts this week and is ready to pick up five-year German bonds if markets come closer to fully pricing two ECB rate rises this year. BNP Paribas Asset Management, meanwhile, has taken a similar stance since the attack on Iran began, favoring shorter notes and selling longer-dated ones to reduce duration — market parlance for a bond’s sensitivity to interest rate moves.