Structural positioning in European bond futures has continued to lean to the short side since early May.
- GERMANY: Schatz structural positioning stands out as the only long in Europe Pi. With longs set across three of the other four German contracts last week (with the exception of short cover in Buxl), it may soon be joined by Bund (flat), which as recently as early June had the shortest positioning across Europe Pi. Bobl and Buxl positioning is fairly firmly short, with Buxl having the shortest positioning overall.
- OAT: OAT has been in short structural positioning since late April, marking the exit from "flat" that had prevailed for the previous 6 months. Trade last week was indicative of short cover.
- GILT: Gilt structural positioning remains flat, appearing to be little impacted by the conclusion to the UK election campaign in the first week of July. Last week's trade was indicative of short cover.
- BTP: BTP structural positioning has been mired in short territory since the French election call in early June caused EGB risk spreads to widen. Some long setting was seen last week.
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