ESGB - Here Come The Bonds

• Markets had expected the BoE's bank rate hike, but they were caught a bit off guard by a surprising pivot by the ECB, widely seen as the most dovish of major central banks in wanting to hold off talk of any rate hikes until after 2022.
• ECB president Christine Lagarde noted that inflation rates were “tilted to the upside” and “getting much closer to target.” Lagarde’s sudden pivot has sent bonds in a new direction and rates on eurozone area sovereigns surged.
• The relatively calm conditions in US credit markets so far this year have been a distinct contrast to the volatile performance of equities. This is somewhat surprising, given how negative yields are on an inflation-adjusted basis. But conditions might be changing.

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