Summary

• Oil is practically back to pre-war levels, helping to ease inflation risks.
• The tail risk of oil returning to above $100 has therefore significantly diminished.
• Worsening growth dynamics, especially in the US, should start making rates at the short end of the curve look too high.

By Michiel Tukker

The front end looks particularly vulnerable to repricing lower

A further drop in oil prices is paring inflation risks and is making bonds look more attractive to investors amid fragile risk sentiment. Brent