SOCGEN interest-rate strategists say renewed geopolitical tensions have left euro-area government bond yield spreads under widening pressure and the usual seasonal narrowing has not materialized. "The usual seasonal narrowing has not worked because, with expected new issuance after summer and rising political uncertainty, investors appear reluctant to hold spread-long positions," they said. They expect the 10-year France-Germany spread may trade range-bound over the summer but warn that weak fun

SOCGEN interest-rate strategists say renewed geopolitical tensions have left euro-area government bond yield spreads under widening pressure and the usual seasonal narrowing has not materialized. "The usual seasonal narrowing has not worked because, with expected new issuance after summer and rising political uncertainty, investors appear reluctant to hold spread-long positions," they said. They expect the 10-year France-Germany spread may trade range-bound over the summer but warn that weak fundamentals, heavy bond supply and uncertain investor demand warrant caution in the medium term. Italy-Germany spreads remain linked to oil prices; strategists still prefer short-dated sovereign exposure.