SSA Monitor: Mid-year review

Research evidence excerpt

SSA Monitor: Mid-year review

16 July 2026

SSA Monitor FixedRates Income

Mid-year review Global

◆ Advanced funding levels of issuers leaves less supply for the Frank Will

remainder of the year Global Head of SSA & Covered Bond Research

HSBC Continental Europe SA, Germany

frank.will@hsbc.de

◆ Geopolitical uncertainty drives yield levels of S&As higher, +49 211 910 2157

mirroring the movements of Bunds and US Treasuries Kshitiz Sharma

Associate

◆ SSA spreads over swaps and sovereigns, however, seem to Bangalore

be anchored at tight levels

EUR Supra & Agencies: mildly bullish sector stance

Supras and agencies have not been able to decouple from the underlying trend in the

sovereign market and yields have risen in line with those of eurozone sovereigns.

However, S&A spreads against swaps and Bunds have been relatively stable. Given

that many issuers are well advanced in their 2026 funding programmes, a lack of

supply in Q4 2026 could fuel an outperformance of S&As vs swaps as in 2025,

driving our mildly bullish sector stance.

USD Supra & Agencies: neutral sector stance

The renewed concerns about the Middle East conflict and the Strait of Hormuz have

pushed oil prices up again. Driven by concerns about the inflation impact of higher

energy prices, markets have priced in more hawkish central bank responses, which in

turn have driven Treasury yields higher. Against this backdrop, yields of S&As have also

risen, mirroring the movement of Treasury yields. At the same time, G-spreads of supras

and agencies remain in positive low single-digit territory, with some tier-1 issuers even

trading in the secondary market at slightly lower yield levels than Treasuries.

EU: First disbursements under SAFE and the EUR90bn Ukraine support loan