European Rates Watch: EGB supply, positioning & flows

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European Rates Watch

EGB supply, positioning & flows

Futures positioning: Front-end back in favour

03 August 2026

Outstanding: Across the German curve, DU remains the most net-long contract

followed by UB (Exhibit 11). In contrast, positioning in OE and RX is net short. In Italian

contracts, investors are net long in IK as well as BTS, although the latter being more

moderate. Meanwhile, net positioning in OATs is net short.

Rates Research

Europe

Weekly change (Wed-Wed): Positioning in German futures was driven by an increase

in long positions across all contracts, with long additions outpacing the build-up in

shorts. This was particularly evident in the OE and RX contracts. In contrast, positioning

in Italian and French futures remained broadly unchanged (Exhibit 12).

Edvard Davidsson

Rates Strategist

MLI (UK)

Euro area bank demand of government debt

In June, euro area banks increased their holdings of euro area general government debt

securities by €17.1bn. As in most months this year, with the exception of May, purchases

remained sizeable but were below the levels recorded in the corresponding month of

2025 (Exhibit 30 & Exhibit 31).

German banks were the largest buyers, adding €7.9bn of euro area government debt, of

which €5.5bn was in non-domestic securities. Dutch banks added €0.8bn, primarily

through non-domestic purchases. In contrast, Austrian banks reduced their holdings of

non-domestic euro area government debt while increasing exposure to domestic bonds.

French banks were net buyers of €7.4bn. They purchased €10.0bn of non-domestic

debt while reducing their holdings of French government bonds by €2.6bn. Belgian banks

added €0.6bn, with purchases also concentrated in non-domestic securities.

Spanish banks increased their holdings by €0.7bn. Similar to French banks, they were

net sellers of domestic government debt (€3.7bn) but increased their exposure to nondomestic bonds by €4.5bn. Portuguese banks were net sellers, reducing holdings by

€0.3bn.

Italian banks were the only net sellers among the four largest euro area banking

systems. They increased their holdings of domestic government debt by €0.3bn but

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