EU CREDIT UPDATE: Belfius Bank €500m 6y SR Non-Pref - Final Terms

Interest in upside Euribor call condors has increased over the past few sessions. The continued pullback in front-end EUR rates vol has cheapened these structures, providing an attractive entry point for those looking to benefit from a rebound in outright vol on the back of dovish data developments. 

• Although ECB officials have stressed that policy is currently in a “good place”, the bank retains a highly data dependent stance. This isolates the end of the month as a key focus for markets. We’ve noted that the risk of another cut still comfortably outweighs the risk of a hike. Chief Economist Lane explicitly said as much yesterday, and the likes of Villeroy, Rehn and Simkus remain cognizant of downside inflation risks.
• October flash PMIs are due on October 24, before EZ Q3 flash GDP on October 30 and EZ October flash inflation on October 31. Note that the ECB’s October decision is also due on October 30. The signalling (if any) at this decision could be shaped by extremely fresh data developments. However, the base case is currently that the “good place” guidance remains unchanged.
• Today’s notable upside call condor flow has included:
  • ERU6 98.37/98.50/98.75/98.87 call condor, bought for 1 in 4k.
  • ERM6 98.37/98.50/98.75/98.87 call condor, bought for 1 in 5k (also bought in 14k yesterday).
  • ERM6 98.50/98.625/98.750/98.875 call condor, bought for 0.5 in 18k

Canadian Prime Minister Mark Carney is due to arrive at the White House shortly for a third in-person meeting with US President Donald Trump. The pair will hold a bilateral meeting and working lunch. There is no join press conference scheduled, but reporters are likely to be admitted into the Oval Office for questions at the top of the visit. 

• The meeting comes shortly after Washington and Ottawa launched mandated consultations ahead of next summer’s deadline to renegotiate the United States-Mexico-Canada Agreement. While Ottawa has been subject to a raft of Trump’s national security/sectoral tariffs, the USMCA has ensured Canada’s effective tariff rate remains relatively low. The Financial Post noted last month, “a bit more than 90 per cent of Canadian products are entering the US [tariff] free.”
• CBC noted, “there is clear and obvious pressure on [Carney] to secure some kind of deal. But pressure is growing on the Trump administration as well. American farmers are clamouring for bailouts, bourbon producers are pushing for tariff relief and automakers are asking for a break of their own.”
• The New York Times notes, “Canadian officials remained largely silent before leaving for Washington, and people in the industries most affected by [Trump’s] trade war said they had little expectation of any significant breakthroughs.”
• Chris Sand at Johns Hopkins University said: "My hypothesis has been that a USMCA truce would be politically shrewd ahead of the November 2026 midterms. It would end the trade war with the two biggest U.S. trade partners and stabilize prices and create conditions for business investment."

• Treasuries extend session highs - as do German Bunds in the last couple minutes, no Block/cross or obvious headline driver into the European close.
• A sell-off in stocks, however, coincided with the move in rates.
• Tsy Dec'25 10Y contract climbed to 112-20.5 high, trades 112-20 last (+7.5), initial firm resistance to watch is 113-00, the Sep 24 high. A break would be bullish. Curves mixed: 2s10s -1.290 at 55.072, 5s30s +.413 at 101.599.
• Equities: DJIA down 92.99 points (-0.2%) at 46602.59, S&P E-Minis down 23 points (-0.34%) at 6766.25, Nasdaq down 114.3 points (-0.5%) at 22829.46.