European Rates Watch: EGB supply, positioning & flows

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European Rates Watch: EGB supply, positioning & flows

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European Rates Watch

EGB supply, positioning & flows

Futures positioning: Core and more core 25 May 2026

Outstanding: Across the German curve, DU remains the most net-long contract (Exhibit Rates Research

11). Positioning is net short in OE and even more so in RX, while UB sits close to neutral. Europe

Investors remain net long in Italian futures, and neutral in French.

European Rates Research

MLI (UK)

Weekly change (Wed-Wed): Open interest increased for all German future contracts,

Edvard Davidsson

with net positioning turning more long/less short across the curve (Exhibit 12). In Rates Strategist

contrast, positioning in Italian and French futures was led by added shorts However, as MLI (UK)

edvard.davidsson@bofa.com

we begin to approach the rolling period, we grow increasingly hesitant in relying on

Sphia Salim

futures positioning as proxy for broader market positioning/sentiment. Rates Strategist

French headwinds, long 10y EU vs France sphia.salim@bofa.com

Nathan Thomas, CFA

Heading into the summer months, we see several headwinds for France that the market Rates Strategist

may be underappreciating. First, 45% of expected 2026 net French govt bond supply is MLI (UK) nathan.thomas@bofa.com

scheduled for the Jun-Aug period. Second, with the budget season approaching, the

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verdict determining Le Pen's potential candidacy in July, and the eventual presidential

race beginning, we remain concerned that political & fiscal risks would start to weigh on

OATs early on. Current valuations do not appear to reflect this. Lastly, Moody’s

maintains a negative outlook; by the October review that outlook will have been in place For a complete list of our open trade