The cleanest carry in Europe
Negative net supply and a patient central bank make the Bund the path of least resistance into year-end.
The case for the Bund is not exciting, and that is precisely the point. With redemptions outpacing gross issuance through the autumn, the technical picture is doing the work that conviction usually has to.
Supply does the talking
Net supply turns negative in the back half of the year across the core, and the central bank has signalled it is in no hurry to change course. That combination — fewer bonds, a steady hand — is the cleanest carry-and-roll story in the region, even if the headline yield looks unremarkable next to the periphery.
The risk is the obvious one: a fiscal surprise from any of the large issuers would unwind the supply tailwind quickly. But absent that, the Bund remains the path of least resistance.