S&P Global: European bond short interest highest since April 2022

  • Short interest across European Bonds is at the highest level since April 2022
  • Italian, German and French government bond short interest recently peaked
  • European elections and the resulting general election in France has led to a decrease in short interest across French government bonds
  • “High” for longer in the US is leading US Treasury borrowing to climb as yields are expected to remain high.

Matt Chessum, director at S&P Global Market Intelligence, said in an emailed statement: “As inflation data continues to offer surprises on its way down to the 2% target, uncertainty remains high in regards to the size and timing of any future cuts. At the moment, markets remain extremely sensitive to market data and any move in inflation numbers either higher or lower than expectation, is having a sizeable impact upon bond yields. This is providing an opportunity for short sellers to take advantage of the frequent moves seen in bond prices which is increasing the amount of borrowing taking place across government bond markets.”

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