EZ spreads won’t rise by much despite high debt levels

A sustained re-opening of the Strait of Hormuz would probably mean euro-zone bond spreads narrow a bit further this year. What’s more, our base case is that spreads in Italy and France will remain contained despite their high debt levels, even if renewed political uncertainty in the run-up to the elections in both countries next year may well lead to further periods of bond market turbulence.

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