US: Inflation Expectations Resilient To Higher Oil Prices

• The 5Y breakeven has fallen 4bps today after Friday’s sharp rise despite the continued move higher in oil price.
• The growing resilience can be seen more clearly in trend terms, with the 5Y breakeven currently at 3.04% compared to the 3.6-3.7% when WTI was last at $113/bbl.
• The same can be said of the 5Y5Y forward breakeven, which at 2.31% is just off last week’s lows which were the joint lows since mid-March.

US 5Y breakeven (white), 5Y5Y breakeven (yellow) and WTI 1st future (green)Source: Bloomberg