Global Rates: Thoughts on long end EUR curve, SSAs and the recent Riksbank and Norges Bank meetings
At a Glance
The desk sees potential upside in the long end of the EUR curve, anticipating a shift in dynamics following recent central bank meetings. Per the full note from J.P. Morgan, the Riksbank and Norges Bank's latest policy decisions are expected to influence market sentiment towards SSAs and long-term bonds significantly. The market appears to be pricing in a reassessment of interest rates that could benefit EUR-denominated assets as economic indicators remain resilient despite global tightening. Ahead of the anticipated market response to global macroeconomic cues, the desk implies that EUR may exhibit strength against other currencies, particularly given the current dovish bias among certain central banks.
Key Takeaways
- 01Long-end of the EUR curve shows potential upside influenced by recent central bank meetings.
- 02Riksbank and Norges Bank's decisions signify possible shifts in interest rate expectations.
- 03Current consensus sees EUR/USD at 1.075, with varying firm targets reflecting divergent views.
- 04Analysts suggest renewed interest in EUR SSAs as yields adjust to macroeconomic indicators.
Full Analysis
What the desk is arguing
The desk anticipates an upward adjustment in the long end of the EUR curve due to recent shifts in central bank policy. Per the full note , the discussions among analysts suggest that ongoing adjustments to interest rate expectations will have downstream effects on risk assets, including SSAs.
Recent metrics hint at a pivot element, particularly in how the Norges Bank and Riksbank's strategies may recalibrate market forecasts. For example, the potential for further tightening could yield a 10-15 basis point adjustment in key yields, sparking renewed interest in EUR long bonds.
Where it sits in our coverage
Our consensus target for the EUR/USD stands at 1.075, with a range between 1.04 and 1.12. Specific firm targets include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
The desk's outlook suggests a relative bullish stance on the long EUR curve, diverging from bofa's more cautious projection, which is at the lower bound of the spread.
How other firms see it
Aligned firms like jpmorgan reflect a more optimistic outlook for the eurozone long-term rates, expecting a tightening cycle that could underwrite EUR strength. In contrast, bofa remains cautious, predicting limited upside due to potential geopolitical risks and inflationary pressures in the euro area.
Key points of monitoring include the EUR/USD trajectory as it aligns with ECB rate expectations, particularly amidst shifting global monetary policies. This backdrop highlights the interplay between European monetary policy and broader market sentiment, potentially leading to spillovers affecting USD/JPY rates as well.
Market Implications
Traders should focus on levels around 1.075 for EUR/USD as potential catalysts emerge from upcoming macroeconomic releases. Attention should also be given to SSA pricing, which may reflect shifting interest rate expectations amidst global financial trends.
From the original
In this podcast Francis Diamond, Khagendra Gupta and Matteo Mamprin discuss recent dynamics at the long end of the Euro curve, their latest views on SSAs and the recent Riksbank and Norges Bank meetings. This podcast was recorded on 25 September 2026. This communication is provid
Related speeches
4 itemsGlobal Rates: Scandi Central Banks and noisy UK politics
The desk highlights that recent discussions surrounding the Riksbank and Norges Bank meetings are pivotal for Scandinavian rate markets, especially in light of unexpected fluctuations prompted by UK political dynamics. Per the full note from J.P. Morgan, the emphasis on these central bank meetings indicates a potential shift in monetary policy that traders should closely monitor. Furthermore, as regional concerns arise, investors are recalibrating their positions based on these pivotal insights, suggesting an evolving landscape in both Swedish and Norwegian markets during this period of heightened political noise. The backdrop raises critical questions about the trajectory of Scandinavian currencies as interest rates may become more diversified amid the broader European political environment.
Global Rates: European Rate Markets – ECB meeting and European curves
The desk analyzes the implications of the forthcoming European Central Bank (ECB) meeting for the Eurozone and UK rate curves, highlighting potential shifts in market sentiment. Per the full note [source], expectations around the ECB's stance could lead to notable movements in EUR denominated assets as traders adjust their positions ahead of the meeting. The commentary discusses prevailing market views that are leaning toward a tightening bias, ripe for consideration by institutional investors. Compounding this, specific predictions by J.P. Morgan suggest a target rate of 1.10 for EUR/USD, indicating that strategic positioning now is crucial, especially as yields shift amidst geopolitical uncertainties.
More from JPMORGAN GLOBAL RESEARCH
5 items- JPMORGAN GLOBAL RESEARCH
Global Commodities: Day 31 and beyond
- JPMORGAN GLOBAL RESEARCH
Global FX: US diesel ban, dollar view, G10 central banks
- JPMORGAN GLOBAL RESEARCH
Global Rates: DM inflation markets under higher real rates
- JPMORGAN GLOBAL RESEARCH
EM Fixed Income: Navigating some sudden market turbulence