Rates Weekly: Policy uncertainty add a duration risk

EUR rates:Recap of the week:   European rates were driven by geopolitical noise, sharp spillovers from Japan and heavy supply, with macro data in the background. Repricing in long-dated JGBs destabilized global duration and triggered repeated bear-steepening episodes in euro curves, while the front end remained anchored by ECB on-hold pricing. France outperformed as budget clarity helped tightening the OAT-Bund spreads, while Gilts saw renewed long-end stress on fiscal-credibility rumors and JGBs spillover.Tactical view:  We expect range trading on Bund, and we maintain our medium-term outlook for a gradual rise in Bund yields. EUR steepeners remain attractive. We expect a flattening of the 2Y-10Y German swap spread curve.  We keep our Long 20Y OAT vs. OLO to capture the depricing of the French politicial risk. On inflation, we see some reasons for on ongoing underperformance of OATi vs. OATei in real yields to persist.Insights of the week: Will Livret A outflows bring a (welcome) support French OAT?US rates:Foreign investors are an important investor base for the US Treasury. Will they back away from US Treasuries going forward? We do not see active liquidation but could see diversification down the road … and we also think US policy volatility should lead to higher risk premiums.