Typo on iPhone. Yes you need to hedge, currency, interest rate, and now inflation. Retail traders shouldn’t trade large amount because retail can’t get swap agreements. 12% can be easily wiped if the currency depreciates the same amount.
21-Day 912796X53 05/25/2023 6.200% 6.326% $99.638333 Just remember, if you are benchmarking with Ts, 12% is not a good risk number. Just bought 21 days T today at an investment yield of 6..326%
Thank you ! which market data subscription is required for this ? Also, if you buy in IB, where does the Brazilian govt. deposit the interest amount ?
Re: data feeds, again I have to look—I’ll get back to you. I work the bond markets a lot, so I got on the phone with them and signed up for all the bond data feeds that IB offers. I have not bought Brazilian bonds yet, but I believe IB keeps the bond on their books in IBs name, secured by your cash. I think this is true for all bonds—even US Treasuries. So the coupon and maturity payouts go to IB, which in turn forwards them to your registered account. Should they default, IB is protected because the position is secured by the ca$h in your account used when you placed the order.
@kmiklas Yes I’m interested in Brazilian debt as well. Buying the local currency bonds would obviously be a big FX play. Brazil has managed their inflation way better than many other industrialized countries this time around. Realized real rates have stayed well into positive territory. It should help the BRL. Brazil has some external debt issued in BRL. Did IB say if they offer the BRL denominated paper? Realized Real rates (Benchmark minus Core inflation rate):