Rates Spark: Poised for Potential Breakouts
Shifts in US Bond Yields Following Iran Conflict
Following the onset of US military action against Iran, we observed a notable increase in the 2-year real yield, which climbed from 55 basis points to above 65 basis points. Meanwhile, the 2-year nominal yield advanced by an additional 10 basis points, causing the 2-year break-even inflation rate to edge up from 2.8% to 2.9%.
Earlier in the week, this pattern suggested that investors were anticipating higher inflation while remaining unconcerned about a significant slowdown in real economic growth. However, this outlook shifted on Thursday, as the 2-year real yield retreated below 60 basis points, signaling a change in market sentiment.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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