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Citigroup, Bank of NY Mellon Join List of Issuers


GBP1.147bln of medium-dated gilts with offer-to-cover of 2.24x


Green BTP: Priced


E-MINI S&P (Z1): Key Resistance Exposed

Inflation Theme Continues To Build


The inflation theme continues to gain momentum with 10-year US breakevens inching up to a multiyear high - last reading 2.20%, the highest since 2014.

  • Breakevens and forward inflation swaps have been pushing higher since the beginning of the year and building on the broader trend that materialised from mid-2020. The EUR 5y5y forward inflation swap has traded up to 1.39% and has not only returned to pre-Covid levels, but has also returned to early 2019 levels.
  • As we noted last week, we have observed an uptick in discussion on inflation. A combination of logistical bottlenecks in light of Covid -related mobility restrictions, rallying oil prices (and commodities more broadly), a recovery in global demand and coordinated monetary and fiscal expansion, are all supportive of a build up price pressures.
  • Even as the inflation narrative builds, the persistent uncertainty around the trajectory of the coronavirus and risks to the economic recovery will likely limit the extent to which inflation expectations shift higher.
MNI London Bureau | +44 0203-865-3808 |
MNI London Bureau | +44 0203-865-3808 |