Commodities | Global | Rates | US
Russia Conflict Brings Steepeners Into Play
- By Bilal Hafeez and Caroline Grady
- Sign-up to discuss on Slack
- 4 min read
Summary
• Rates markets have responded differently to the action stage (invasion) of the Russia/Ukraine conflict than to the reaction stage (sanctions).
• However, in both stages, the curve has steepened beyond the 5y part of the curve.
• Meanwhile, oil shocks typically see steeper curves. We therefore expect USD/EUR 5s30s curves to steepen over the medium term.
• In EM, we focus on CE-3 rates and expect 2s10s steepening.
Summary
• Rates markets have responded differently to the action stage (invasion) of the Russia/Ukraine conflict than to the reaction stage (sanctions).
• However, in both stages, the curve has steepened beyond the 5y part of the curve.
• Meanwhile, oil shocks typically see steeper curves. We therefore expect USD/EUR 5s30s curves to steepen over the medium term.
• In EM, we focus on CE-3 rates and expect 2s10s steepening.
Subscribe to Macro Hive Professional to read this article
and enjoy exclusive professional features such as in-depth analysis, insightful op-eds, and more.
Already have Macro Hive Professional account? Log in