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The jump in the oil price today has “exacerbated fears about a stagflationary shock” and pushed global bond yields even higher this morning, says Jim Reid of Deutsche Bank.
He told clients:
Admittedly, if you look over the entire conflict, bond yields have moved in lockstep with oil, and Friday doesn’t look too anomalous. However, if you zoom in a bit, then yields have shifted from being broadly in line with the current price of oil to looking a bit high relative to it. That suggests some evidence of a small decoupling on Friday.
With these end-of-week moves, 30yr US yields hit their highest level since 2007, 30yr Japanese yields their highest since their introduction in 1999, 30yr gilts reached levels last seen in 1997, and 30yr German yields returned to 2011 levels.
It suggests a steep drop-off of investment in April as geopolitical uncertainty may have weighed on investment decisions.
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Rolling coverage of the latest economic and financial newsThe jump in the oil price today has “exacerbated fears about a stagflationary shock” and pushed global bond yields even higher this morning, says Jim Reid of D...
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