Summary• Risk assets crumble as stagflation concerns return to the fore• US rates surge higher, with US 10-year breaking decisively above 3% and nearing its 2018 cycle highs• Little fresh news driving markets. The yield curve has ‘bear steepened’, with shorter-term rates increasing by less than longer-term rates (2-year +7bps). This was a clear sign from the BoE that it thinks market pricing of rate hikes is overdone. Commodity currencies have been pummelled overnight amidst rising global growth fears and escalating risk aversion. Volatility remains exceptionally high in the domestic rates market and liquidity remains patchy.

Source: Stuff May 05, 2022 22:15 UTC