Brent: Inflation expectations rise on price rebound – Deutsche Bank

Jim Reid’s team at Deutsche Bank reports that Brent Oil prices rebounded by 1.2% after two days of declines, even without a clear headline driver. This move fed into higher inflation expectations, with 1‑year Euro inflation swaps rising to 3.02%. The bank also notes that Brent later fell back about a percent overnight, leaving prices roughly unchanged versus the prior morning.

Oil rebound lifts Euro inflation expectations

"Turning to the Middle East, oil prices were back up again yesterday, albeit with no obvious headline driving the moves. So after two days of consecutive declines, Brent crude rose +1.2% after being higher earlier in the session. And in turn, we saw the impact on inflation pricing, with 1yr Euro inflation swaps (+9.3bps) rising to +3.02%."

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"However, overnight Brent has fallen around a percent taking it back to roughly where it was this time yesterday. So a big round trip. That’s helped 10yr US yields reopen half a basis point lower this morning after the holiday."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)