Euro Area Rates Strategy

Morgan Stanley recommends entering a long 30y EU versus swaps trade, citing attractive relative valuations and a supportive supply outlook for the summer months.

Key Takeaways

• 1.Recommend entering long 30y EU versus swaps following the H2 2026 issuance plan announcement.
• 2.EU 30y segment screens cheap relative to a GDP-weighted EGB average.
• 3.SSA spreads are expected to remain constructive, but with limited room for near-term outperformance.

Table of Contents

• Key Takeaways
• Interest Rate Strategy
• Supply update
• Recent performance
• Trade idea: Enter long 30y EU
• Trade Ideas & Recent Publications
• Valuation Methodology and Risks

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