Euro Cash: Stuck in the range

Research evidence excerpt

Euro Cash: Stuck in the range

Aditya Chordia AC (44-20) 7134-2132 Global Markets Strategy J P M O R G A Naditya.x.chordia@jpmorgan.com

J.P. Morgan Securities plc 19 June 2026

Matteo Mamprin (44-20) 7134-0329

matteo.mamprin@jpmorgan.com

J.P. Morgan Securities plc

Euro Cash

Stuck in the range

• DM curves broadly bull/twist-flattened since our last publication, with German

yields outperforming vs. USTs across the curve

• We maintain our bias to trade German duration tactically from the long side, and

look to add OW 10Y Germany on any sell-off back toward ~3.10%

• We stay long 10Y Germany vs. US reflecting attractive valuations and our medi-

um-term modestly constructive stance on euro duration

• We stick with our cautious intra-EMU/€-SSA stance given heightened uncertainty,

valuations that are not necessarily cheap, poor risk adjusted carry and modestly

crowded OW positioning

• Hold long 30Y EU vs. swap to express our strategic OW EU theme

• We also keep short 10Y Italy vs. France as carry-efficient broad risk-off proxy and

UW 10Y Belgium vs. France/Germany in 50:50 flies as a Middle-East re-escalation

tail-risk hedge

• Intra-EMU RV: 3s/10s Austria and Italy credit curve are screening excessively flat,

while Greece looks excessively steep

• Supply: around €17bn of conventionals with auction next week in the Netherlands,

Germany, Italy and Lithuania

DM curves broadly bull/twist-flattened since our last publication, with German yields out-

performing vs. USTs across the curve (Figure 1DMcurvesbroadlybul/twist-flatenedsinceourlastpublication,withGermanyieldsoutperformingUSpersacrosthecurve). Yields rallied in the first half of the week

on optimism around Middle-East developments, before retracing in the second half, with