EM LATAM CREDIT: Argentina: Further Fiscal Adjustment - Positive

Natixis recommend receiving Sep ’25 ECB-dated OIS, targeting a move to 167bp, with a stop set at 183bp (177bp last).

• They note that “in addition to the de-escalation of trade tensions, the market has recently adopted the 'steady hand policy' of Schnabel, which involves integrating a potential ECB terminal rate at 2.00%”.
• Natixis see a higher probability of the ECB going below 2.00% by September (rather than halting at 2.00%) for several reasons, namely broader macro weakness, inflation expectations, higher risk of a hard landing for the U.S. than the market prices at present and expectations for a continued weakening of wage growth.

We've published our latest Europe Pi positioning update - Download Full Document Here

• Long structural positioning has shown some signs of fading over the course of May, though there still aren't any outright shorts across European bond futures contracts, with multiple "longs".
• The quarterly Gilt roll has begun, with the contract in "very long" territory (first notice is May 29 and there is a holiday Monday so rolls have started on the early side;  for Eurex it's June 6).

SFIZ5 95.50/96.00/96.50c fly vs 97.00/96.50ps 1x2, sold the fly at -15 in 18.5k.