S&T desk - advice for placement day

Think it's hard to distinguish between signal and noise in answers to this sort of question but here's my two cents. A major caveat here is how good the bank's franchise of that specific/ccy product is, typically assessed in terms of how good your prices are to clients, and market share, as well as the type of macro HF. Additionally, I can only really advise on G10. Here are some broad rules for a typical multi-manager platform.

1. Liquid Linear Rates are good. 

USD/EUR/GBP. All of these have very established liquid swaps/swap spreads and cash/credit markets. There is plenty of macro and RV going on, and I'd say the majority of macro HF interest is in these ccys. AUD/CAD are not as liquid, but are broadly similar and both have strong cash markets (and semis) and IBOR/OIS swaps. NZD/NOK/SEK are not nearly as liquid, some would say illiquid, and you tend to find these markets as primarily swap markets (NZD/NOK don't have cash maturities beyond 10Y), and are mainly played by real money, CBs, and very good individual HF traders with strong knowledge of local idiosyncrasies. I would 100pc avoid CHF and JPY rates as they are super de-correlated from the rest of G10 and are very poor franchises for banks (for CHF on the pricing side, and for JPY on the client interest side). In general, macro HFs find it easier to accept PMs in more liquid products because strategies are more scalable, transparent, data/market colour is easier and cheaper to get, curve interpolation/RV screeners/pricing tools are much easier to build, and they allow a greater breadth of strategy (macro, rv, systematic etc). 

2. Cash bonds better than swaps, in many cases.

For banks cash isn't as profitable or sophisticated as swaps, but provides very good RV training, as rates rv is typically juicier and more nuanced in cash vs swaps (think of all the factors that affect cash but not swaps, special/GC repo, QE buybacks, issuance, coupon money, redemption, and bond-future basis). Cooler dislocations appear in cash cos there's only so many of a particular bond out there, so the market is easier bullied than swaps, which in theory you can have as much DV01 as you want. The downside is that bond rv is very balance sheet heavy and you will find that your balance sheet costs as a PM overwhelming if you have a bad year. Swap curve interpolation is quite complicated (ask a quant to walk you through even the USD curve), and there are some "arbs" here and there, but this is very hard to scale in a HF and stuff that nerdy is typically only reserved for dealers, unless you're heading off to BlueCrest. In practice many HFs treat swaps like "potatoes", and surprisingly a lot of young dealers as well, merely to trade duration and curve. Asset swaps (spreading a bond and a matched maturity swap) and invoice spreads (spreading future and swap) are done by both desks, which may stop you from being too pigeon-holed. My personal opinion is that a bond desk will teach you bond specifics and good RV, and also teach you how to do macro swaps trading, the inverse is not true. 

3. Avoid non-vanilla or illiquid rates options products.

Swaptions and curve caps/floors for USD/EUR/GBP are great markets cos they are very liquid in OTC as well as in listed gamma (exchange traded options on bond futures), they also give you a degree of sophistication versus the standard linear rates guy, ie. dynamics such as Kangaroo issuance, negative convexity, Formosa vega supply etc. Obviously great for macro plays, though RV is much more difficult to execute here vs in linear space, given the need to hedge with OTC swaps or bonds and cos the market is much thinner for dealers to hedge RV risk. Other G10s except for AUD, basically don't have liquid rates options markets. You want to avoid so-called "hybrid/correlation/structured" desks because these are bank franchise desks, and exist primarily to cross flows between hedge funds buying options and RM/private banks/corporates typically selling options for yield, and do not help you develop a buy-side risk-taking mindset. On a deeper level these desks manage cross-asset correlation risk through even more esoteric products such as Quanto CDS (a CDS in a different ccy), multi-asset range-accruals (structured notes which pay a higher yield if say, equities, rates, fx to be range-bound), and these are never utilised as standalone strategies for PMs, though you might have that one structured trade in a highly levered and cheap, optionalised bet. 

4. Avoid non-USD/EUR (Core) inflation trading.

Again, back to the liquidity idea, trading inflation-linked bonds and swaps outside of these two is basically entirely dependent on your relationship with the dealer. Good macro/RV exist here, and you could be that one or couple of PMs that specialise in a market most of the nominal rates world doesn't have a very good understanding of. 

5. Avoid STIRT/XCCY.

The STIR world will be less interesting without IBORs as tenor switches (3s6s) and LIBOR-OIS switches won't exist. SOFR is very close to treasury rates (as it's based on repo), and so the only worthwhile bases left is SOFR-OIS and FX-OIS (FX forward yield against OIS rate). Both of these, though very liquid, are (will be) highly crowded by the community of STIR traders out there. Arguably, unless you are particularly authoritative in those fields and like being super specialised in a product far detached from "long-end rates", then you should avoid this. On the macro front, rates will remain lower for longer, so on an outright level the product is involatile. You will find that hunting for 3-4bps, in normal circumstances in this field to be considered a "very good trade". XCCY trading at HFs is very much hit and miss, as trading is super dependent on corporate flows knowledge/experience, and they are not as liquid.