Amid continued volatility in sovereign bond yields, a remarkably stable feature of markets has been in bond spreads, with little signs currently of a surge in corporate spreads, as was seen following the last inflation shock in 2022. 

Due to the ongoing uncertainty on the outlook for inflation, markets are pricing in a succession of rate hikes over the next year, of up to an additional 100 basis points (bps) of tightening across the major central banks.