UBP says oil above USD 100 raises inflation fears, keeps central banks on tightening path
SPY•Rates and markets reprice policy expectations
The ECB raised rates 25 bps to 2.5%; markets price a Fed hike at 90% probability as yields jumped across the US, eurozone and UK.
US 2-year yield rose 26 bps to 4.63%; the 10-year Treasury neared 5% as markets repriced tighter policy expectations.
Global equities fell 0.9% on MSCI ACWI; energy gained 1.7% while Europe underperformed, with the STOXX Europe 600 down 1.7%.
Oil spike lifts inflation and tightening fears
UBP flagged a renewed inflation shock as Middle East conflict pushed Brent above USD 100/bbl, triggering broad bond and equity sell-offs.
UBP sees volatility as potentially short-lived
UBP expects volatility to be short-lived on resilient growth, citing potential Fed or Treasury action if yields overshoot.
