Rates weekly: Mind the gap between the tweets and reality

EUR rates - Recap of the week: Oil and Middle East conflict-related headlines continue to be the main driver of market sentiment. Rate hike anticipations have been tempered somewhat but not removed by a (fragile) ceasefire and softer PPI data in the US. Central banks (especially the ECB and Fed) are reinforcing optionality, and markets are nudging terminal rates lower at the margin while curves stay modestly positively sloped in the euro area and broadly stable in the US.Tactical view: Headline risk remains too significant. We remain on the cautious side overall. Along with our existing performing positions, volatility / jumps in yields offer tactical opportunities to fade excessive moves.Insights of the week: Is further volatility compression still achievable?US rates: Rates continue to trade within recent ranges, which we think could hold for some time, barring a new major development on the war. With the ranges we prefer most of them from the long side: directionally, via swap spreads, and long inflation (though all at better levels than here).