EM CEEMEA CREDIT: MNI EM Credit market wrap CEEMEA (May 2)

Long end ASWs a little weaker on the day alongside the sell off in outright bonds detailed recently.

• Bund & Buxl ASWs have failed to push meaningfully above levels that prevailed ahead of the “whatever it takes” German fiscal moment, while Bund yields haven’t broken below the lows witnessed since the German fiscal loosening was table, pointing to new ranges being established as Germany moves to a new fiscal framework.

Bunds sell off as BBG sources suggest that “the European Union is preparing a package of potential emergency measures to support parts of its economy that could be hit the hardest by US President Donald Trump’s sweeping tariffs”.

• The attempted mitigation of at least some of the growth shock that would stem from the U.S. tariffs is the driver here.
• Bund futures now ~40 ticks off session highs.
• Note that key support in 10-Year yields (2.654%) held for a third consecutive day.

EUR & GBP STIRs off dovish session extremes but still a couple of bp more dovish on the day when it comes to end ’25 implied rate pricing.

• ECB-dated OIS shows ~63bp of cuts through year-end, while BoE-dated OIS shows ~53bp of cuts over the same horizon, comfortably within multi-week ranges.
• The recent rally in equities has removed some of the dovish repricing seen through the London morning & early NY trade, but tariff uncertainty still lingers, limiting the scope of the pullback.