Budget Negotiations a Key Risk for Eurozone Government Bonds
Dow Jones
Sep 04
0540 GMT - The coming 2027 budget negotiations will be a key risk across the eurozone government bond [EGB] universe, potentially refocusing investor attention on fiscal consolidation challenges, Societe Generale rates strategists say in a note. "We therefore continue to favor the front end of EGB curves, where carry remains most attractive," they say. Eurozone bond yield spreads remain close to recent highs, and within Societe Generale's projected ranges, the strategists say, keeping their forecasts unchanged. Persistent geopolitical uncertainty and elevated oil and gas prices are not helping, alongside the global focus on growing sovereign debt, expectations of renewed bond supply, and increased political uncertainty after the summer recess, they say.
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