- Given the magnitude of the recent rise in traded interest rates, a casual observer would be forgiven for concluding that tail risks, such as an escalation of geopolitical tensions in Ukraine, present an asymmetric risk to interest rates to the downside.
- Our call is still for 10Y Treasuries to touch 2.25% and for 10Y Bunds to converge to 0.5%.
- An added benefit should, in theory, be to ease fears in peripheral markets of an abrupt policy tightening, but it hasn’t played out this way so far.
For further details see:
Rates Spark: A Short Drop Within An Uptrend