Multi-Asset Strategy Daily

Global bond yields continue to reprice higher driven by duration shedding, geopolitical risks in Iran, and tight energy markets. While UK inflation data was softer than expected, the broader market remains focused on a 'higher-for-longer' interest rate environment.

Key Takeaways

• 1.The rates market is undergoing a technical, position-driven repricing higher in yields, shifting toward a 'higher-for-longer' regime.
• 2.Geopolitical tensions in the Middle East and significant oil inventory draws are sustaining an inflation risk premium in energy prices.
• 3.UK CPI data came in softer than expected (2.8% vs 3.0%), reducing June hike probabilities, though market reaction remains cautious due to oil shocks.

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