Global Rates: Thoughts on long end EUR curve, SSAs and the recent Riksbank and Norges Bank meetings

The Euro curve, particularly the 1030s segment, has experienced significant flattening as terminal rate expectations rise and investors unwind positions. While the Euro SSA market faces near-term headwinds from French fiscal volatility and geopolitical uncertainty, EU bonds maintain structural appeal, increasingly trading like core government debt. In Scandinavia, central bank policies diverge: the Riksbank maintains current rates but signals future hikes, while the Norges Bank has raised rates to 4.5%, emphasizing a "higher for longer" policy trajectory through 2027. These shifts reflect a broader environment where terminal rate volatility and shifting neutral rate expectations dictate market positioning across fixed income and currency markets. Market participants remain cautious, prioritizing stability in energy prices and global rate volatility before re-engaging in carry trades.