The equity jitters from the US are starting to ease, which brings significant upside potential for 10Y euro rates in the near term. A worsening of risk sentiment on the back of AI concerns helped push the 10Y swap rate some 20bp below the peak in January. But Wednesday saw better stock performance and the VIX, as a measure of risk sentiment, eased significantly lower. UST yields made a move higher, helped partly by better macro data, but somehow Bund yields are still stuck too low in our view. We’re looking at a bear steepening from here, as the front end of the EUR curve remains firmly anchored. Markets price in a ... (full story)