The softer tones carry over to Europe as risk stays more subdued
- German DAX futures -1.3%
- UK FTSE futures -1.3%
The decline in European futures is more measured, even when you put together the drop in the cash market yesterday – as compared to US stocks.
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The fact that yields are surging despite breakevens slipping this week tells the story that this is more than just a buff in inflation expectations. Adding to that is real yields jumping by nearly 40 bps now from the lows seen a the start of the month. Ouch.