The relationship between the bond market and oil prices is causing concerns about inflation and the Federal Reserve's decision-making. The recent decline in crude oil prices has contributed to a retest of 4.50% for 10-year yields. However, with oil prices rebounding by $1.80, yields have increased by 5 basis points across the curve. Interestingly, the movement of the US dollar is opposite to that of yields.
Oil prices have led to a decline in commodities, pushing them to a two-year low. This has caused a rally in bonds. The decline in commodities is due to concerns about the Omicron variant of COVID-19 and its impact on global economic growth. The bond rally is a result of investors seeking safe-haven assets amidst the uncertainty. The decline in commodities has also affected stock markets, with global equities experiencing losses. The situation is being closely monitored by investors and analysts as they assess the potential impact on the global economy.