Global Rates Ideas: EM & DM

Research evidence excerpt

Global Rates Ideas: EM & DM

Fixed Income ● Rates

25 June 2026

As we discussed in UK Rates Strategy: Optimism in the price (24 June 2026), with market-

friendly news and dovish risks now more adequately priced in, we have closed our ‘receive GBP

1Y1Y OIS’ trade idea as it has moved close to its target.

Looking ahead to next week, there is little in the way of domestic data that is likely to be a big

market mover. Instead, UK investors will closely follow political developments and any

comments from Andy Burnham as he seeks to become the next Prime Minister. Meanwhile,

there will be supply in the form of auctions of a 5Y linker and a green gilt in the 10Y sector.

Daniela Russell

Japan

Monetary policy:

Key data/events: May Jobless Rate (30 June, %, prior: 2.5); June PMI Manufacturing (1 July,

prior: 54.9); June PMI Composite (3 July, prior: 52.5); June PMI Services (3 July, prior: 51.8)

Key existing trade ideas: Pay Japan JPY 2Y1Y OIS (see Table 5)

Prime Minister Sanae Takaichi has unveiled an investment roadmap for Japan’s economy,

outlining JPY370trn of spending over 14 years across strategic sectors, including

semiconductors, cloud computing and gaming. Funding is expected to come from a mix of

public and private sources, but details on the funding split and implementation plan remain

limited. While the programme should lift potential growth over the long term, it is likely to require

higher fiscal outlays before any growth benefits are realised. We therefore continue to see a

possibility of higher yields across the JPY curve – the super-long end could reprice higher on

fiscal concerns, while the front end should remain supported by hawkish central bank rhetoric.

We maintain the trade idea to pay JPY 2Y1Y OIS.

Justin Heng

New Zealand