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Breakevens Pop After Real Yields Back At YTD Lows

US TSYS
  • 10Y breakevens have firmed 4.5bps to 2.73%, back closer to the mid-Nov'21 high of 2.78% when there was only 60bp of hikes priced for 2022, not 134bp at present.
  • This came as nominal yields rallied on a combination of payrolls (rising participation & softer wages, but a further drop in the u/e rate) and broader geopol risk, which pushed real yields back to ytd lows of -1%.

10Y nominal (yellow), breakeven (white) and real yield (green)Source: Bloomberg

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