British linkers rescue the day

Edito Breakeven for the 10-year Bund€i has pulled back below 1%, the breakeven for the 10-year TIPS to 1.87%. Inflation is clearly not a concern in Germany or for that matter in the United States. If it is a concern, it is for remaining weak, as is also the case for inflation expectations. Index-linked Gilts are the only one s to stand out on account of their very decent breakeven inflation rates. As a consequence, given the weak nominal rates, the real yield curve still camps comfortably in negative territory. Over recent trading s essions, crude oil prices have tended to trend lower. Recent events in Iran strengthen our view that crude oil prices will renew w i th a slightly bullish trend, but not to the point this would justify modifying our projections. Obviously, trends for nominal yields are not such as to boost breakeven inflation rates. The concerns expressed, notably by the European Central Bank, regarding the growth outlook suggest that a monetary tightening will not be on the cards for quite some time.