At Any Rate Global Rates: ECB and BoE meetings, French spreads and Dutch indexation
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Sep 12, 2025 Join Aditya Chordia and Khagendra Gupta, both Rates Strategists at J.P. Morgan, as they dissect the impact of the recent ECB meeting on European markets. They delve into the bullish outlook for long-duration positions and the implications of political shifts in France, including a new prime minister's budget challenges. Insights into upcoming BoE decisions and the role of Dutch pension funds in indexation strategies add depth to the conversation, making it a must-listen for anyone interested in global rates.
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ECB Comfortable With Small Inflation Misses
- The ECB appears content with current inflation progress and will tolerate small forecast undershoots unless deviations are large or persistent.
- Market pricing of ~10bp cumulative cuts by mid-2026 is reasonable, but further easing needs clear data evidence.
Bullish Bias On German Duration
- German 10-year yields have traded in a tight range and JPMorgan retains a modest medium-term bullish duration bias.
- Improving long-term demand for high-rated EGBs and positive carry underpin that bias despite limited term premium.
Higher German Issuance, But Limited Term Premium
- German net bond issuance will rise materially in 2026 as investment and defense spending kick in.
- JPMorgan expects the debt-to-GDP peak to stay below peers, limiting a sustained rise in German term premium.