Growth driven bounce in EUR rates to steepen the curve

Since early 2018, EUR rates have been sent to the abyss, mainly driven by major disappointments in the Eurozone growth and the softening of the ECB. We believe growth metrics are key for long EUR rates this year. With depressed expectations, we see prospects for positive growth surprises with potential to lift long EUR rates temporarily above our end-2019 target. This should also steepen the EUR 2y/10y curve.