Report
Window for rebound in breakeven inflation rates is closing
Edito The European Central Bank has lowered its headline inflation forecasts from 1.6% to 1.2% for this year and from 1.7% to 1.5% for 2 020. Core inflation forecasts have also been revised downward s and remain extremely low at 1.2% for 2019 and 1.4% for 20 20 . The central bank also cut its growth forecasts, notably for 2019 , down from 1.7% to 1.1%. Inflation rates remain below official targets everywhere, having pulled back to 1.6% in the United States, to 1.5% in the Eurozone and to 1.8% in the United Kingdom. Since mid-February, crude oil prices have flatlined , with Brent at $65/bbl. The yield for the 10-year Bund slumped in the wake of the 7 March meeting of the Governing Council, falling to 0.06%. The yield for the 10-year TNote has been hovering around 2.66% since the start of 2019. I n short, the environment could not be more unfavourable for linkers, with breakevens remain ing very low, save in the United Kingdom on account of country-specific factors.
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Natixis
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René Defossez
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