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2026-07-13 13:29:40
[JPMorgan Chase tactically longs German and UK bonds, believing energy tail risk is under control] (1) JPMorgan Chase interest rate strategists stated in a report that the bank has established tactical long positions in 10-year German and 10-year UK government bonds, and has set strict stop-loss levels for German bonds, aiming to take profits when the yield falls below 3%. (2) Strategists believe that the possibility of an upside tail risk event in the energy market appears to be under control, thus limiting the risk of further sell-offs in fixed-income products. Nevertheless, the renewed escalation of tensions between the US and Iran has brought energy prices and inflation concerns back into focus, leading to a sharp sell-off in developed market bonds, approaching the top of the recent trading range. (3) From a cross-market perspective, after adjusting for relative monetary policy expectations, the yield on US medium-term Treasury bonds is still slightly higher than that of other developed market bonds. Therefore, the bank continues to favor long positions in 10-year German government bonds relative to US Treasuries.
