Economy

The EU’s Brexit negotiator has urged the UK to engage with Brussels over Northern Ireland, warning that tearing up their trade deal could damage peace and stability in the region.Maros Šefčovič, European commission vice-president, was responding to UK threats that it would draw up legislation next week to disapply parts of the Northern Ireland protocol, which governs post-Brexit trade on the island of Ireland.In an interview with the FT, Šefčovič described the protocol as “a measure for peace”. “I don’t see how this [UK move] is promoting peace, stability and predictability for Northern Ireland and for the island of Ireland,” he said.The UK government has received legal advice that it would be justified in overriding parts of the protocol in order to support the 1998 Good Friday Agreement that brought peace to the region. Northern Ireland’s Democratic Unionist party on Friday blocked the election of a new speaker at the region’s national assembly, effectively blocking the formation of an executive, until the protocol was scrapped.Unionists say the deal undermines the region’s ties to the UK because it puts a trade border for goods in the Irish Sea. Šefčovič declined to say how Brussels would respond to any unilateral UK move on the protocol but said it is “unacceptable for us” to change an international agreement that was less than two years old. “I would say there is a united position of all EU member states and the [European] parliament,” he said.An EU ambassador told the FT that Brussels would respond calmly “but firmly” to any unilateral action by London. “Constantly attacking the protocol is not just utterly unhelpful, but it’s also quite irresponsible and it’s playing with fire given the risk of polarisation inside Northern Ireland,” the ambassador said.Diplomats said the EU was likely to wait for any UK legislation on the protocol to pass through parliament before responding. But measures it could take include scrapping the post-Brexit Trade and Cooperation Agreement, which would introduce tariffs on UK exports to the single market. However, diplomats pointed out that in the meantime Brussels could reactivate legal action against London for failing to implement full border checks in Northern Ireland. It paused the process in July 2021 to bolster the negotiating process.Šefčovič said Northern Ireland had a “unique opportunity” to grow its economy as a member of both the UK and EU markets, and added that the region’s business community supported the current arrangements. However, he cautioned that uncertainty over the protocol was holding back investment.“There are a lot of new investment opportunities, which are on the shelf . . . because these big investors from the US, Canada, Europe . . . are waiting to see how this would pan out,” he said.Šefčovič said that if the UK decided to override the protocol, Brussels would have to impose customs and animal health checks on goods, but did not say how or where these checks would take place.“We, of course, are responsible for the integrity of the whole single market. And I think it’s quite clear that it would be unacceptable to have an unguarded backdoor to the single market,” he said.Dublin fears unilateral action by the UK could cause disruption to its own trade with the EU. Simon Coveney, the Irish foreign minister, warned in a BBC interview on Friday that Ireland’s economy could become “collateral damage”.Šefčovič acknowledged that the protocol has affected intra-UK trade and has proposed fewer controls on freight from Great Britain that is destined for Northern Ireland. “If we work together, we know how to reduce the checks by 80 per cent and we are proposing express lanes. The same for customs procedures, cutting them at least by half.”However, Liz Truss, UK foreign secretary, maintains there should be no controls at all on British freight destined for Northern Ireland. Šefčovič said he could only discuss such changes if the UK implemented the measures it had already agreed, such as allowing EU officials to access real-time, complete customs data. “This is really a tiny little effort the UK has to do to make sure that this system works,” he said. “There is a basic pre-requisite [for concessions] that we have also to feel that the UK is ready to meet us halfway . . . that we would get access to the IT system, that they accept the fact that there has to be some minimal checks.”He added: “I want this to end well for EU-UK relations because I think we just really need to close this chapter and build a new one.” More

A survey of professional forecasters, meanwhile, seemed to endorse the Fed’s hope it can tame inflation without killing millions of jobs in the process. Estimates for annual inflation a year from now in the Philadelphia Federal Reserve’s quarterly survey published on Friday dropped to 3% or less, depending on the specific price measure. Meanwhile the consensus view on the unemployment rate in the next two years ticked up to just 3.8% from the current 3.6%, an outcome that would enthuse Fed officials if it plays out.Policymakers, including Chair Jerome Powell, have been warning U.S. households that the large increases in interest rates they are planning to control the inflation that has soured the national mood are likely to be painful in and of themselves. The Fed raised its benchmark rate by half a percentage point last week and Powell has said increases of the same magnitude are warranted at meetings in the next two months.”The process of getting inflation down to 2% (the Fed’s target) will also include some pain, but ultimately the most painful thing would be if we were to fail to deal with it and inflation were to get entrenched in the economy at high levels, and we know what that’s like,” Powell told public radio’s Marketplace on Thursday.The week’s headline annual inflation readings at the consumer and business production levels eased for the first time in months, offering some hope that consumer price increases that reached 8.5% year-over-year in March may have crested.While they didn’t slow by nearly as much as expected, investors – rather than further stoking fears of ever-increasing inflation – responded to the upside-surprises by bidding up bond prices and pulling yields from multi-year highs.On the week, the 10-year Treasury note yield dropped by about 20 basis points, the biggest weekly decline since early March, and the 10-year inflation expectation reflected in Treasury Inflation-Protected Securities hit its lowest since February.Indeed, a new inflation expectations benchmark measurement from ICE (NYSE:ICE) showed the one-year outlook has now dropped to near 4.5% from 6% in mid-April. Graphic – ICE inflation expectations index ICE inflation expectations index: https://graphics.reuters.com/USA-FED/INFLATION/akvezxjwrpr/chart.png About half of the drop in Treasury yields appears to have been driven by the decline in inflation expectations, Piper Sandler’s Head of Global Policy Roberto Perli wrote in a note disentangling that aspect from other factors that contribute to changes in bond yields. That “is good news for the Fed,” Perli wrote. “(I)f it continues (which is a big if, of course), it might even induce the Fed to be somewhat less forceful in its hiking campaign. However, market inflation expectations are still too high for the Fed to claim victory for now.” Consumers, meanwhile, appear to believe the price grind will not keep accelerating.Data out Friday from the University of Michigan’s twice-monthly survey of consumer attitudes showed no upward move in households’ outlooks for inflation one year out for the third months in a row, holding steady at 5.4%. The view over five years was unchanged at 3% for a fourth straight month.”They are still in the game,” former Fed governor Randall Kroszner said of the Fed’s quest for a so-called “soft landing.””Inflation expectations have not become unanchored despite inflation going from a decade where they cannot get to the goal to going to four times it. They have maintained credibility,” said Kroszner, now a professor at the University of Chicago Booth School of Business. “That is a pretty amazing feat.” More

WASHINGTON (Reuters) – U.S. consumer sentiment slumped to its lowest level in nearly 11 years in early May as worries about inflation persisted, but household spending remains underpinned by a strong labor market and massive savings, which should keep the economy expanding.The University of Michigan’s survey on Friday showed the deterioration in sentiment, which some economists said pushed it into recessionary territory, was across all demographics, as well as geographical and political affiliation. Gasoline prices and the stock market have a heavy weighting in the survey. Gasoline prices resumed their upward trend this month, setting an average record high of $4.432 per gallon on Friday, according to AAA. Fears that the Federal Reserve will have to aggressively tighten monetary policy to bring down inflation have unleashed a massive equities sell-off on Wall Street.”But confidence has been a poor guide to consumption growth in recent years, so we would not read too much into that signal,” said Michael Pearce, a senior U.S. economist at Capital Economics in New York. “Just because consumers resent paying higher prices and are suffering limited availability doesn’t mean they aren’t still making those purchases.” The University of Michigan’s preliminary consumer sentiment index tumbled 9.4% to 59.1 early this month, the lowest reading since August 2011. Economists polled by Reuters had forecast the index dipping to 64. The sharp decline is in stark contrast with the Conference Board’s consumer confidence survey, whose index remains well above the COVID-19 pandemic lows.The Conference Board survey places more emphasis on the labor market, which is generating jobs at a brisk clip. Wages are also rising as employers scramble to fill a record 11.5 million job openings as of the end of March.The University of Michigan survey’s gauge of current economic conditions dropped 8.4% to 63.6. That was the lowest reading since 2013, and 36% of consumers attributed their negative assessment to inflation. Its measure of consumer expectations declined 9.9% to 56.3. Consumers viewed buying conditions for long-lasting manufactured goods as the worst since the survey started tracking the series in 1978. Economists were unfazed, noting that consumers were sitting on at least $2 trillion in excess savings accumulated during the pandemic. “But consumer spending keeps rising, and with savings high, household debt low and the jobs market strong, that spending should continue until the economy falters,” said Robert Frick, corporate economist with Navy Federal Credit Union in Vienna, Virginia.Even as consumers stressed about high prices, long-term inflation expectations appeared to be well anchored. The survey’s one-year inflation expectations were at 5.4% for the third straight month. Its five-year inflation expectations were unchanged at 3.0% for the fourth consecutive month.Stocks on Wall Street rebounded after a tumultuous week, while the dollar fell against a basket of currencies. U.S. Treasury yields rose. INFLATION LIKELY PEAKEDThere have been worries that high inflation and the Fed’s interest rate hikes, which started in March, could abruptly slow growth or even tip the economy into recession. The economy contracted in the first quarter under the weight of a record trade deficit, but domestic demand remained solid.Though inflation is likely to remain elevated, signs are growing that price pressures have peaked. A separate report from the Labor Department showed import prices were unexpectedly flat in April as a decline in the cost of petroleum offset gains in food and other products. Import prices had surged 2.9% in March.Economists had forecast import prices, which exclude tariffs, would climb 0.6%. In the 12 months through April, import prices rose 12.0% after accelerating 13.0% in the year through March. Government data this week showed monthly consumer prices increased at the slowest pace in eight months, while the gain in producer prices was the smallest since last September. With oil prices drifting higher in May, monthly import, consumer and producer prices are likely to pick up.Annual inflation rates are expected to continue edging lower, though likely to stay above the Fed’s 2% target. The deceleration is mostly the result of last year’s big increases dropping out of the calculation. The U.S. central bank last week raised its policy interest rate by half a percentage point, the biggest hike in 22 years, and said it would begin trimming its bond holdings next month. Imported fuel prices dropped 2.4% last month after soaring 17.3% in March. Petroleum prices declined 2.9%, while the cost of imported food increased 0.9%. Prices of imported capital goods rose 0.4%. The cost of imported consumer goods excluding motor vehicles was unchanged. Prices of imported motor vehicles and parts climbed 0.3%. Excluding fuel and food, import prices rose 0.4%. These so-called core import prices advanced 1.3% in March. They increased 6.9% on a year-on-year basis in April. Some of the slowdown in the monthly core import price gains reflect the dollar’s strength against the currencies of the United States’ main trade partners. The greenback has gained about 2.65% on a trade-weighted basis since the Fed started raising interest rates.”Past appreciation in the U.S. dollar will also put some downward pressure on import prices,” said Ryan Sweet, a senior economist at Moody’s (NYSE:MCO) Analytics in West Chester, Pennsylvania. More

BOGOTA (Reuters) – Colombia’s economy could have grown by 7.5% in the first quarter of 2022 versus the year-earlier period, mainly boosted by domestic consumption, though this will begin to moderate amid inflationary pressures, a Reuters poll revealed on Friday. Estimates from 13 analysts for economic growth fluctuated between 6% and 8.30% in the three months ended March 31. If growth is in line with the poll’s median forecast of 7.5%, Latin America’s fourth-largest economy will have expanded at a slower rate than in the prior quarter ending Dec. 31, when growth hit 10.8%. “The good dynamics of domestic demand, the high terms of trade and expansionary monetary policy could have contributed to growth during the first three months of 2022,” David Cubides, director of economic research at stock brokerage Alianza, said. “However, looking ahead to the following quarters, the rise in inflation, tighter financial conditions abroad and the increase in the monetary policy rate would lead growth to gradually moderate,” he added. The analysts also forecast that the Andean country’s gross domestic product will expand by 5.25% this year, before growth slows to 3% in 2023.Last year Colombia’s economy grew by a historic 10.6%, versus a weak comparative period in 2020. The forecast cooling is partly explained by Colombia’s central bank opting to hike its benchmark interest rate, which it has raised by a total of 425 basis points since September last year, to 6%, its highest level since May 2017. The interest rate rises come as a move to tackle runaway inflation, which hit 9.23% in the 12 months to April, which is far from the bank’s target of 3%.An average of analysts’ estimates forecasts the central bank will raise interest rates up to 8.5% by the end of this year. More

WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen will meet with Polish Prime Minister Mateusz Morawiecki on Monday to discuss how Russia’s invasion of Ukraine affects Poland’s economy as part of a week-long trip that also will take her to Brussels and a G7 finance leaders meeting in Germany.While in Warsaw, Yellen will “express her gratitude for the generosity Poland has shown in welcoming refugees” and will discuss the rising threat of food insecurity and a global minimum tax deal that will raise critical revenues, the U.S. Treasury Department said in a statement.Yellen on Monday also will meet with Polish Finance Minister Magdalena Rzeczkowska and National Bank of Poland Governor Adam Glapinski, as well as U.S. Ambassador to Poland Mark Brzezinski. The Treasury said throughout her meetings, Yellen will discuss the Russian invasion’s impact on Poland’s economy, particularly on inflation, and on its fiscal policy and supply chains.Yellen also will visit facilities for Ukrainian refugees, including the World Central Kitchen, which is providing meals for refugees and highlight the Treasury Department’s ongoing efforts to address food security challenges arising from Russia’s invasion and blocked Ukrainian grain and exports.On Tuesday in Brussels, Yellen will meet with European Commission President Ursula von der Leyen and U.S. Ambassador to the European Union Mark Gitenstein, the Treasury said.”These meetings will focus on the impact of Russia’s war against Ukraine, including European energy security and Russian energy imports, Ukraine’s economic assistance needs, and on the implementation of the global tax agreement,” the Treasury said.Yellen also will deliver remarks to the Brussels Economic Forum 2022 on the war’s impact on the global economic outlook and the future of multilateral.At the G7 finance ministers and central bank governors meeting in Bonn, Germany, Treasury said Yellen will work to advance the global recovery and discuss steps to increase economic pressure on Russia to end its invasion.The G7 is made up of closely allied wealthy industrial democracies: Canada, Britain, France, Germany, Italy, Japan and the United States. More

Good evening,One important thing to remember about our supposedly “post-Covid world” is that it is, as yet, far from being post-Covid.Reports from China illustrate the point, with the government announcing that it will strictly limit its citizens going abroad. This is part of increasing official efforts to combat a coronavirus outbreak that has led to weeks of city lockdowns.At the same time, President Xi Jinping prioritising the elimination of the virus is coming under pressure as a result of the economic strain it is causing. For example, China’s main financial centre Shanghai recently imposed restrictions on non-government food deliveries in the city.Xi’s zero-Covid strategy threatens to crush economic growth and pile pressure on hard-pressed businesses, with the president this year seeking an unprecedented third term in office.North Korea, meanwhile, has confirmed its first coronavirus cases and death since the pandemic’s beginning and imposed nationwide lockdowns. The country’s chief ally China has, despite its own problems, promised North Korean leader Kim Jong Un its “full support and assistance”.North Korea is one of only two countries that have not yet initiated a Covid-19 vaccination programme. The other is Eritrea.In Europe, Russia’s war in Ukraine has led to questions of who is going to pay for the damage. At the same time, farmers in Ukraine — some of the world’s most important agricultural producers — are accusing the Russian army of plundering their land.What are the chances, however, of the war being brought to a negotiated end? Jonathan Powell, chief executive of charity Inter Mediate, which works to resolve armed conflicts around the world, says that those chances must be kept alive.He criticises, for example, UK government ministers for “outcompeting each other to expand Ukrainian war aims with aggressive rhetoric”. The risk of a wider catastrophe must be managed by offering Russian president Vladimir Putin what, in ancient times, the Chinese general and philosopher Sun Tzu called a “golden bridge” to retreat over, he adds.US president Joe Biden has a reputation for being a first class negotiator, stretching far back in his political career to the Salt talks of the 1970s. At this dangerous moment, however, he finds himself not in a position to take the advice of former US secretary of state Henry Kissinger that it is unwise to be facing more than one major enemy at a time.While it was Kissinger who attracted China into friendly relations with the US a half-century ago, Biden finds himself assailed by a diversity of enemies, among them the relatively realigned Russia and China.As the FT’s Ed Luce writes, reflecting the views of CIA chief William Burns, the US is facing a new global realignment. All this, plus — in common with much of the world — inflation, too.Taming fast rising prices, says US Federal Reserve chief Jay Powell, will “include some pain”. This may well mean global recession. Tough times indeed.Latest newsElon Musk puts $44bn Twitter deal ‘on hold’Ukraine claims 200th Russian jet shot downUK sanctions spread net to Putin’s family and associatesFor up-to-the-minute news updates, visit our live blogNeed to know: the economyEuropean gas prices have soared after Russia imposed sanctions on EU energy companies. Moscow’s move reinforces Putin’s willingness to use energy as a weapon against the EU.Norway’s oil fund has denounced “corporate greed” in executive pay. The world’s largest sovereign wealth fund has voted against remuneration packages at Intel, Apple, IBM and General Electric.Latest for the UK and EuropeAllianz, Europe’s largest insurance company by market value, says it is highly likely to leave Russia. The move could hit the German company’s profits by as much as €500mn.The controversy at Monte dei Paschi continues after executives at the world’s oldest bank were acquitted of helping hide more than €2bn in losses. The overturning of the convictions of 13 bankers in one of the biggest financial scandals in Italian history has drawn shocked reactions from local politicians and campaigners.UK attitudes today are positive about high levels of immigration. With a growing sense that borders are under control, the appetite for hostile policies is shrinking, writes the FT’s John Burn-Murdoch.Global latestBaltic states have hailed Finland and Sweden’s expected accession to Nato. The move will dramatically improve the security of Estonia, Latvia and Lithuania, say foreign ministers.Diplomats face “one last chance” to revive Iran’s nuclear deal, writes former Iranian nuclear negotiator Seyed Hossein Mousavian.The cost of living crisis in Australia has raised the prospect of opposition leader Anthony Albanese becoming prime minister. Local alarm has also been sparked after a decision by the Solomon Islands, which is about 2,000km to the north-east of Australia, to sign a security pact with China.Need to know: businessThe sexist comments levelled at Aviva chief Amanda Blanc at the company’s annual shareholder meeting should not be seen as a one-off, writes Helen Thomas. Rare is the woman who has risen through the ranks in business without a few stories about feeling belittled, patronised, overlooked or excluded on account of her gender, she says.As gloomy economic talk threatens to revive memories of the 1970s, rock group Pink Floyd are not complaining. They are selling their back catalogue for about $500mn, with Warner Music and KKR-backed BMG among those interested.Science round upAs if to keep things in perspective and remind us that we live on a small piece of rock in the limitless universe, astronomers have unveiled the first images of the closest black hole to Earth. They hope to glean new information from it about mysterious celestial bodies.There are clues but few answers to the childhood hepatitis mystery, writes Anjana Ahuja. Adenoviruses, Covid-19 and exposure to dogs have all been blamed for new cases around the world.Get the latest worldwide picture with our vaccine trackerAnd finally . . . 

An Andy Warhol silkscreen sold for $195mn, just the week before a football shirt worn by Maradona fetched over £7mn © AP

Here are some reflections about the recent sale at auction of the shirt worn by Diego Maradona, when his footballing genius defeated England in the 1986 World Cup. As one who witnessed the event, I didn’t see which England player exchanged shirts at the end of the game with the Argentine star. But it was Steve Hodge who showed the enterprise to approach Maradona and ask for the shirt. Hodge played just three times for England and jobbed his way around numerous football clubs with a final brief spell at pride of London’s East End, Leyton Orient. The shirt at auction made more than £7mn. A nice bit of pension. Well done, Steve. More

(Reuters) -The Federal Reserve will do what it needs to do to bring down very high inflation, Minneapolis Fed President Neel Kashkari said on Friday, though how much it will need to do depends in part on how quickly energy and other supply constraints dissipate. “I’m confident that my colleagues and I have the conviction to do what we need to do to bring inflation back down,” Kashkari said at the start of a conference on energy and inflation co-hosted by the Dallas and Minneapolis Fed banks. “I hope we have to do less, and we’ll only be able to do less if more supply comes on line.” U.S. central bankers spent much of last year hoping and expecting more supply would come on line and ease what was then seen as a transitory bout of inflation. By the end of the year it became clear that supply chains were taking longer than expected to get unstuck, workers were not returning to the labor market nearly as as fast as had been hoped, and inflation was building, not cooling. In March, as Russia’s invasion of Ukraine began pushing up energy prices globally and COVID-19 lockdowns in China slowed supply chains further, the Fed began raising interest rates. Fed Chair Jerome Powell now says that while he’d welcome an easing of supply constraints, he won’t count on it, and has all but promised more big rate hikes ahead. Experts convened for the Fed’s energy conference Friday appeared to dash any Fed policymaker hopes for quick resolution, at least as far as energy production goes.”It’s going to get worse,” Occidental Petroleum (NYSE:OXY) CEO Vicki Hollub said, on the outlook for gas and oil prices. “We are struggling to meet what demand is..we are headed for an environment where we just can’t amp up supply very quickly.”Cindy Taylor, CEO of Oil States International (NYSE:OIS), said that while her services company is going all out to help get more oil out of the ground, she permanently lost a lot of workers in highly technical jobs during the COVID-19 shutdowns. “You can’t turn on a switch,” she said. “It’s going to take a while, and workers and supply chain challenges are going to be key to that.” More

(Reuters) – Battered U.S. and German government bond markets have just put in their best weekly performance since early March, suggesting a painful surge in yields due to high inflation may finally be abating as the focus turns to growth fears.Gilts in Britain, where the Bank of England warned of a potential recession, saw their best performance since 2011.Central banks have only just started tightening policy and inflation remains elevated, so there’s reason for caution.But here are four key shifts that suggest a turning point for the world’s biggest debt markets. 1/ NO CONVICTIONKey benchmark 10-year bond yields have failed to hold above critical levels: 3% on U.S. Treasuries, 2% on British gilts and 1% on German Bunds.”The fact that we didn’t hold onto that was taken as a signal that … there wasn’t that much conviction behind high yields,” said ING senior rates strategist Antoine Bouvet.Investors are covering underweight positions in U.S. bonds sensitive to rates swings, usually the longest dated, at levels last seen in early 2021, BofA said in an investor survey on Friday. Respondents considered short positioning on rates — bets that yields will rise further — as the most overcrowded trade. 2/ PEAK INFLATION?Market inflation expectations have fallen particularly sharply since the U.S. Federal Reserve jacked up rates on May 4. Inflation breakevens, which measure the difference between nominal and inflation-adjusted yields, fell further after U.S data this week suggested inflation may be peaking. The 10-year U.S. breakeven rate is at 2.7%, down from over 3% in April. It’s dropped 20 bps this week alone, the sharpest weekly fall since April 2020. The euro zone’s the five-year, five-year breakeven forward inflation swap, tracked by the European Central Bank, fell to roughly two-months lows at around 2.16%. Those falls have been driven by soaring inflation-adjusted , “real” yields. U.S. 10-year real yields have jumped 25 bps over the last two weeks, Germany equivalents are up 43 bps. U.S. inflation-linked bonds (TIPS), a key hedge against future inflation, have seen outflows for the last three weeks, according to BofA citing EPFR data. If markets are right, “central banks’ inflation problems are less dire than the market considered them to be weeks or months ago,” said Arne Petimezas, senior analyst at AFS Group. Graphic: U.S., euro inflation breakevens fall-https://fingfx.thomsonreuters.com/gfx/mkt/gkplgkrqbvb/breakevens.png 3/ LOWER TERMINAL RATEWith inflation expectations falling, markets have reduced bets on the “terminal rate” — where this hiking cycle ends. That’s a sign investors believe less hikes may be necessary to contain inflation. In the United States, money markets imply rates will rise to around 3% in mid-2023, compared to around 3.5% in early May. In the euro zone, where economists have warned rate hike pricing has been excessive, the ECB’s policy rate is seen at roughly 1.2% in 2024, down from around 1.5% last Friday.”The big move in bonds has been accompanied by a rerating of the rate outlook for the Fed, (Bank of England) and ECB,” said Divyang Shah, strategist at Refinitiv’s IFR Markets.That is “very different to the prior corrections for bonds that did not last as expectations were still rising.” Graphic: ECB rate hike bets- https://fingfx.thomsonreuters.com/gfx/mkt/mypmnydqavr/ECB%20pricing.PNG 4/ SAFE HAVENFinally, this week’s stellar bond performance came with a 4% slide in world stocks, putting top-rated government bonds back in the safe-haven seat.That inverse correlation had recently been absent as equity and bond prices dropped together in the face of surging inflation.In the United States, it’s the first week since late March where 10-year bonds and the S&P 500 are set to end in opposite directions.”The bit that’s been missing is that risk-off means bonds rally,” said Nick Hays, head of sterling rates and credit at AXA Investment Managers. “That doesn’t always work but we can’t go on for too long where bonds don’t behave as a safe-haven.” Graphic: Treasuries vs S&P500-https://fingfx.thomsonreuters.com/gfx/mkt/gdpzyazjavw/sp%20vs%20usts.png (This story corrects para 27 to say ‘late’ not ‘early’ March). More