How Middle East Developments and German Fiscal News Are Impacting Yields: Euro Area Rates Strategy | Europe

研报英文原文证据摘录

How Middle East Developments and German Fiscal News Are Impacting Yields: Euro Area Rates Strategy | Europe

IdeaM

Valuation Methodology and Risks

Below you will find a list of our current trade ideas, entry levels, entry dates, rationales,

and risks.

Exhibit 13: Valuation Methodology and Risks

Interest Rate Strategy

Trade Entry Level Entry Date Rationale Risks

have returned to the forefront and we expect them to drive some

Short 10y France vs an equal-weighted basket of 41bp 03/07/2026 Fiscalrelativeconcernsunderperformance. Our 3-factor model shows France at a residual

Italy and France of Risksplaceto thethe tradedeficitincludeon a better-than-expectedpositive fiscal developmentstrajectory.that

~16bp, though it was higher at the beginning of the year.

Long 30y EU vs swaps 91bp 25/06/2026 We think EU the30y ongoingcheapnessWAMversusdecline,a GDP‑weightedshould supportEGBtheaverage,sector.together with Risks to the tradebondincludesor a resumptionan earlierofsyndicationrisk-off. of the 30y

We think the big picture story remains one of mid-cycle economies, a good

Long BTP G 10/31 vs OBL 4/31 47bp 12/06/2026 supply/demandenvironmentdynamics,for carry withstrategies.a decentIn thechunknearoftermeuro weareasee11supportsupply behindfrom us Risks to the tradeMiddleincludeEastanyescalation.renewed risk-off driven by

and expected light issuance until the summer .

Short RAGB 2/36 vs NETHER 7/36 14bp 24/4/2026 We think the sovereign is tradingfundamentals.rich to other countries with similar macro Risks to the tradeeasingincludefiscalEUconcerns.flexibility under the EDP

Long IRISH 10/32 vs short BGB 6/32 -19 10/04/2026 We think Ireland fundamentalsdraglookforattractiveBelgium.while downgrade risks remain a Risks to the trade include the Irish DMO tapping the sector.