Rates Spark: Still Exposed to More Upside

Government bond yields continue to face upside pressure as geopolitical tensions in the Middle East persist and resilient macro data fuels expectations for central bank rate hikes.

Key Takeaways

• 1.Yields are continuing to rise as the market struggles to shake off bearish dynamics caused by a lack of resolution in the Middle East.
• 2.European rates are appearing more vulnerable to shifts in sentiment compared to the US, despite currently tracking global upward trends.
• 3.Macroeconomic resilience, particularly in US employment data, is giving central banks like the Fed more room to prioritize inflation, leading to higher priced-in rates.

Table of Contents

• Rates Spark: Still exposed to more upside
• Hard to shake off the bearish dynamic without a solution in the Middle East
• Wednesday's events and market view
• Author
• Disclaimer

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