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Fixed Income Commentary

Intriguing RV graphs: Background to behind-the-curve concerns that nevertheless remain unresolved

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Intriguing RV graphs: Background to behind-the-curve concerns that nevertheless remain unresolved      

Key points
  • JGB market last week: Amid expectations for US/Iran deal, moves to partially reverse market trend following escalation of tensions in Middle East

  • However, 2s10s JGB yield spread remains wide; even as surging crude oil prices ease, concerns about "falling behind the curve" remain

  • Potentially due to perceptions regarding the government's stance. More aggressive rate-hiking stance likely needed to shift to narrowing trend for the spread

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