Meanwhile in markets, Omicron fears are so yesterday. We’ve had more confirmation from plenty of corners of the world that the new variant, while definitely more contagious and less susceptible to vaccines, isn’t causing more severe disease. Furthermore, punters have also gotten over their Fed Chair Powell taper talk hangover.

At 1.46 the US 10y Treasury yield is up 10bps from its recent low. However, trading in the 10y bond is now rangebound as a breakout to higher ranges has failed to materialize despite higher and higher inflation readings. With inversions popping up in the Eurodollar futures curve and the Treasury yield curve getting flatter by the day, long bonds are being supported by bearish views on the economy and the Fed having to come down hard on inflation.



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