Taking Position: A long-term view

Research evidence excerpt

Taking Position: A long-term view

Accessible version

Taking Position

A long-term view

The future looks bright 17 June 2026

Large longs on iTraxx Main have been built over the past week. Risk-on momentum is Credit Strategy

building on the back of positive newsflow on the geopolitical risk front, pushing Europe

European credit spreads to outperform those of the dollar market. While iTraxx Main 5y Ioannis Angelakis

trades just shy of CDX IG spreads, there is less compression upside from here. As a Credit Derivatives Strategist

result, we think that 10y Main offers a strong risk-reward to own risk here. With 5y5y MLI+44 (UK)20 7996 0059

forward spreads trading at high multiples relative to broader market spread levels, and ioannis.angelakis@bofa.com

carry and roll profiles now the least attractive in years, we see the 10y tenor for Main as Barnaby Martin

a way to own credit risk with better upside than the 5y could offer. CreditMLI (UK)Strategist

barnaby.martin@bofa.com

Exhibit 1: 12M carry and roll profiles for iTraxx Main 5s10s DV01-neutral steepeners are among

Mohit Agarwalla

the least attractive in years Credit Strategist

We see limited steepening capacity for 5s10s as carry and roll profiles are the last attractive in years MLI (UK)

mohit.agarwalla@bofa.com

1.7%

1.4%

1.1%

0.8%

0.5%

0.2%

Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 Jan-25 Jan-26

Source: Bloomberg

BofA GLOBAL RESEARCH

CDS index positioning – the ups and downs

European credit risk has notably outperformed that of the US market, both in IG and HY

space. Main has seen much more sizable longs build up compared to those in CDX IG.

The same story is also playing out in beta land, as XO has seen more sizable net long risk

positioning building up over the past week, compared to that in CDX HY.