Global Strategy Rates Map - Going long Sep ‘26 ECB and 30y Italian real rates

Research evidence excerpt

Global Strategy Rates Map - Going long Sep ‘26 ECB and 30y Italian real rates

Global Research

24 June 2026ab

Global Strategy Global Strategy

GlobalRates Map - Going long Sep '26 ECB and 30y

Italian real rates Reinout De Bock

Strategist

reinout.de-bock@ubs.com

+44-20-7567 0152

ECB President and oil markets speak - we listen Phoebe White

The UBS economics baseline is for a hike in September but we see risks that markets will Strategist

price out some of the 16 bps of tightening currently priced given the shift lower in oil phoebe.white@ubs.com

prices and messaging from President Lagarde. We go long Sep vs July ECB at 16 bps +1-212-713 2130

targeting a move to 8 bps and a stop at 23 bps. 30y Italian real yields have shifted lower Mustafa Oguz Caylan

in past days but we target a drop of another 13 bps to 2.30% (from 2.43%) and a stop Strategist

at 2.50%. On Monday, ECB President Lagarde told European parliamentarians that mustafa.caylan@ubs.com

there “is no evidence yet of de-anchoring of inflation expectations or second-round +44-20-7901 5203

effects that would warrant a more forceful policy response at this stage.” Bhanu Baweja

We were stopped out of our money market flattener (short EUR June ’27 vs EUR June Strategist

’28) at 10 bps of easing priced. We put this money market flattener on when nothing bhanu.baweja@ubs.com

was priced for the ECB based on the idea that a hawkish ECB could lead to some easing +44-20-7568 6833

priced down the road, but the President’s comments could signal a broader shift.

Euro area growth disappointed in Q1 and several clients told us after the last ECB

meeting that the ECB was too optimistic on the euro area's growth outlook in the

forecast horizon.

Speaking about forecasts, we think that the ECB is in a very different spot compared to