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Inflation Breakevens Continue To Trend Lower

US
  • Lower real yields have been the main driving force behind the rally in Treasuries today (-8bps for 5Y real) but breakevens have still trended lower, with 5Y and 10Y breakevens both another 3.5bps lower on the day.
  • The 5Y has recently moved back to pre-Ukraine war levels at 2.89% and whilst the 5Y5Y forward remains slightly above pre-war levels, it has fallen more than 30bps this month to 2.19%.

Source: Bloomberg

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