Forward real yield trades

Forward real yield trades and forward BEI (inflation curve) trades. 

Implied forward real yield and BEI difference trades between two markets. 

An important aspect of trading these bonds is using expectations of future monthly changes in linking indices, provided by economists, to calculate expected forward real yields and expected forward break-even inflation. Making assumptions about future price index levels allows these forward aggregates to be calculated in the same way that forward nominal bond prices and yields are worked out. 

It is possible to infer market expectations about the level of real interest rates going forward by observing yields in government index-linked bonds, which trade in a number of countries including the US and UK. The market s view on the future level of interest rates may also be inferred from the shape and level of the current yield curve. Again from chapter 6, we saw that the slope of the yield curve also has an information content. There is more than one way to interpret any given slope however, and this debate is still open. 

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