Italy yesterday increased its fiscal deficit targets and reduced its growth forecast for 2023 and 2024.

Italy 10-year sovereign bond yields spiked by 0.17% – to 4.96%. Yields retraced some of those gains later in trading to 4.88%.

Hawkish messaging from the Fed and higher oil prices are fueling investor inflation concerns.

There is a material risk that we have second wave of inflation – forcing rates higher and keeping rates higher for longer. Issuers and investors may want to consider acting to protect themselves from this scenario.