• Meanwhile in markets, an eerie quiet as the US is off for the Independence Day celebration. But even without the guidance of our American overlords, the factors that underpinned last week’s humongous bond market rally are alive and well.
  • Commodities are starting the week in the red, with copper futures falling to their lowest level since the start of 2021. Overall commodities are approaching bear market territory, with the Bloomberg commodity index down 17 percent from its March record-high. Natgas futures are trading near multi-month highs for the obvious reason: the daily doom and gloom about the Kremlin deciding to fully close to gas taps. Now, mind you that the correction in commodities has been the key driver behind the bond market rally. Commodities tanking brought down inflation expectations quite a lot. In fact, our key metric for inflation on the shorter-term horizon, the 1-year/1-year forward inflation linked swap rate is down from more than 3 percent to just 2 percent over the span of several weeks.


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