Achtung, risk-on baby! Easing trade tensions and the prospect of the US and China progressively rolling back tariffs has tanked bonds while boosting equities and other risk assets. For the week US Treasury yields are up by 11-19bps across a bear-steepening yield curve, with 10y and 30y yields soaring through key technical levels. Bunds aren’t fairing much better with equally chunky increases of 5-16bps across the curve. Eurozone peripheral bonds outperformed, except for Italy, which saw stronger increases after EU Commission forecasts of further debt to GDP increases in the coming years.

 

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