EFTA Document EFTA01385938

27 March 2015 US Fixed Income Weekly / together with equities giving up some of the recent upside. We condition equity puts on a higher 5Y rate: 18-Dec-2015 SPX 95% put subject to 5s > ATMF + 25 , offer 1.15%, an 73% discount to vanilla at 4.30% Alternatively, delayed hikes mean lower rates. However, unless the Fed abandons hikes in the foreseeable future, risk premia in the belly would remain elevated - 5s might not rally hard as the market remains in a standby position until further