Market Analysis And Principal Investment Themes

Edmond de Rothschild /

13-10-2023

The tension is not due to rising oil prices as the inflation breakeven point has only risen by a few basis points. Nor is it because markets are expecting central banks to stick with high interest rates for longer as even the 5-year and 10-year yield curve has steepened rather than flattened. The real cause is the rise in the term premium, an unobservable variable but one which is subject to various estimation methods. It is geared to so many factors that short term movements can be hard to understand and even harder to anticipate.