Rates weekly: Headline risk but low volatility market

EUR rates:Recap of the week:  Timid continuation of curve flattening and a low volatility market amidst early-year EGB supply. With few macro updates, historical levels were to be found in the UK’s Gilt and JGB markets.Tactical view:  We stay marginally long duration, while keeping our medium-term view of a gradual rise in Bund yields as term premia rebuild. We maintain a structural steepening bias, led by 2s10s, but expect EUR 10s30s to remain volatile and directionless amid uncertain Dutch pension flows and heavy 15-25Y supply, favoring a short 10s20s30s fly. We continue to expect limited tightening in peripheral spreads, with France supported by improving idiosyncratic dynamics and a preference for long OAT vs OLO 20Y, while inflation views favor a re-widening of the 2Y US-EUR inflation swap.Insights of the week:  Updated 2026 EGBs supply outlookUS rates:  Treasuries remain remarkably range-bound despite a remarkable flurry of headlines and events. While the lack of action in the rates markets points potentially more to paralysis than analysis, the past does not offer a lot of hope for the next two weeks.