Rates in 2025: back to the future

An overview of what 2025 holds for rates, including curve shapes, the spreads environment in derivatives, and the eurozone SSA space. We’ll also delve into US debt dynamics and funding pressures, and explore the significance of the Dutch pension fund rule changes

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Rates

Rates go back to the future

A key theme in our vision for 2025 is the maintenance of a 'normal' for rates

Rates

The US 10yr heads back to 4%, but then it’s 5%+ for 2025

It’s 5%+ for the US 10yr later in 2025

Rates

US debt dynamics look scary. Effective policy is critical

The US debt/GDP rate rises by 1.5% a year unless action is taken

Rates

US bond market on the precipice when it comes to funding the deficit

The 10yr Treasury yield already has a 25bp supply concession, which poses a risk of an upward trend

Rates

Spreads to the US to widen for most of 2025

Spreads to US rates have shot wider and we see little reason for them to narrow any time soon

Rates

Steeper EUR curves from both sides

We forecast steeper curves as the ECB lands just below neutral and upward pressures from higher UST yields spill over to the back end of the curve

Rates

Dutch pension funds are prepping for big reforms

Dutch pension funds are in the midst of a transition from a Defined Contribution to a Defined Benefits model

Rates

German Bunds still face pressure relative to risk-free rates

German Bunds remain still face structural headwinds, but there are aslo arguments for stabilisation versus risk free rates

Rates

Eurozone bond spreads: a reordering in progress

Eurozone bond performance is now less about general trends than individual country stories where a relative reordering has already begun

Rates

SSA spreads pushed wider as underlying sovereign levels get reassessed

Sovereign related and supranational issuers are not just caught up in the reassessment of sovereign risk but also face pressure from steeper curves and…

Report Rates

Rates Outlook 2025: Rates go back to the future

Our strategists look at what 2025 has in store for rates

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