Bonds don't like inflation; higher energy/input costs lead to higher inflation, so yields should move up. Our view is this is structural - we are in a more bullish structural environment for commodities including oil, so pressure on yields remains on the upside.

Avoids point forecasts but looks at asymmetries. Break-evens aren't reflecting the risks we're talking about; Middle East highlights that risk. Pressure remains in play; we'll see it in inflation data. In next 3-6 months, more pressure builds, meaning the path for yields is higher. Technical levels broken in global rates markets.

Markets have become much more short-term in nature. There is hope embedded that the conflict will be resolved. Every day of closure builds up input cost pressures, meaning we are building up risks not priced correctly. The playbook: sell rallies in equities and in core rates.

We are there. Over the next fortnight, risks become much more material. Once technical elements (optionality, etc.) are behind us, the next couple of weeks are a critical window. If no constructive resolution, fears will be reflected more clearly in all asset markets, as seen in spot oil.

Higher macro risks and input costs hurt corporations and consumers, which matters for credit. These macro risks are a bigger deal for credit spreads than private credit issues. You're not getting enough premium in spreads. Historical episodes show poor returns after trading at these spread levels. One positive: money flowing from private credit is supporting public credit technically, but the macro backdrop is not supportive for credit right now.