German bund yields have tended to lead global bond yields higher over recent months. UK gilt yields have also risen sharply as a risk premium for a weaker and more volatile GBP is established and the government moves towards an easier fiscal policy, further contributing to higher global yields. Recent economic activity and inflation indicators (headline CPI and long-term break-evens) in the UK and Eurozone support the rising trend in their yields. The market continues to expect an extension of QE in the Eurozone and appears more sensitive to any hint that the extension may be limited or the pace of purchases tapered. ... (full story)