FPXE - Rates Spark: Europtimism

• While difficult to pinpoint the exact triggers of yesterday's rates sell-off in the eurozone, it did happen against a backdrop of growing optimism and an accelerating vaccine rollout.
• Even the ECB could acknowledge this during its press conference later this week, although we think the central bank's aim should rather be to bridge the time until the June meeting, when the pace of its asset purchases is up for reassessment, without causing too much of a hiccup.
• The tightening UST-Bund spread showed EUR rates had some catching up to do, but in our bearish rates view, this dynamic is unlikely to be sustained.

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