#geopolitical-events

#geopolitical-events

The CPI data due this month will be the first hard measure of American consumer prices since the Strait of Hormuz became a conflict zone, and every early signal points to a number that will shock people who stopped paying attention to energy transmission mechanisms after 2022.

The pricing of 10-year inflation-protected Treasuries implies inflation of 2.34% over the next decade, up only slightly from 2.25% pre-war. In other words, only about a fifth of the rise in the 10-year yield this month is accounted for by investors anticipating higher inflation.

"If it turns out that inflation pressures do remain contained, we will get to a place where we cut rates sooner rather than later, but I wouldn't want to point to a particular meeting."

European stock markets are opening in the red, with London’s FTSE 100 down by 0.5% and Germany’s DAX dropping nearly 1% amid geopolitical tensions.

The near collapse of the US$29tn market in government debt threatens the stability of the American financial system, showcasing the fragility of reliance on US debt.