There were two intriguing developments in bond markets last week, as the 10-year Treasury yield surged above 4% to its highest level since March. The first was a similar-sized increase in the 10-year Bund yield, to more than 2.6%. The second was an ~20bp unwinding of 2x10s yield curve inversion on both sides of the Atlantic, amid expectations rates will stay higher for even longer. Our own view, however, is that both 10-year yields will fall back.
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