Global Fixed Income Markets Weekly (Advance version): Carry on into the summer

Research evidence excerpt

Global Fixed Income Markets Weekly (Advance version): Carry on into the summer

J P M O R G A N Global Markets Strategy

26 June 2026

Global Fixed Income Markets

Weekly (Advance version)

Carry on into the summer

• Overview: DM yields extended the post US-Iran MoU rally this week as Rates Strategy

AC declines in energy prices are easing inflation concerns, although US rates Francis Diamond

continued to underperform after the recent hawkish Fed shift. We continue to (44-20) 7134-1504

think that European yields are likely to remain range-bound. We expect carry francis.diamond@jpmorgan.com

to be a key theme for the coming months amid a backdrop of moderating J.P. Morgan Securities plc

volatility and usually lighter market activity through the summer. Looking at Aditya Chordia

previous summers, we find evidence that summer carry works as a theme in (44-20) 7134-2132

aditya.x.chordia@jpmorgan.com

Euro rates, but caveats apply. Intra-EMU/€-SSA spreads have not historically J.P. Morgan Securities plc

exhibited a clear tightening pattern in the summer; given the ongoing

Khagendra Gupta

uncertainty from the Middle East conflict, we don’t think intra-EMU/€-SSA (44-20) 7134-0486

spread carry can provide sufficient cushion against potential risk-off widening. khagendra.x.gupta@jpmorgan.com

Instead, we find evidence of seasonal widening into the summer period, J.P. Morgan Securities plc

especially in German swap spreads. In the current environment, we see value Ben K Jarman

in carry trades across money markets, swap spreads and volatility. (61-2) 9003-7982

ben.k.jarman@jpmorgan.com

• Euro:We remain comfortable with our 2.85–3.15% range for 10Y Bund. On J.P. Morgan Securities Australia Limited

summer seasonality in intra-EMU/€-SSA: no clear tightening trend beyond a Takafumi Yamawaki