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The sovereign debt rout is intensifying, and the drivers are not easing.
Higher oil prices, sticky US inflation, and the European Central Bank's decision to raise interest rates have converged to put fresh pressure on global bond markets.
Traders are now pivoting attention to the upcoming US Treasury auction as the most immediate test of how much demand is left in a sell-off that has become broad-based across sovereign markets.
The case for this lasting rests on the nature of the inputs. Higher oil prices revive the inflation trade. Sticky US inflation makes the argument for near-term rate relief harder to sustain.
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