Barclays_Global_Portfolio_Manager_s_Digest_Yields_in_Focus

This document is intended for institutional investors and is not subject to all of theindependence and disclosure standards applicable to debt research reports prepared for retailinvestors under U.S. FINRA Rule 2242. Barclays trades the securities covered in this report for itsown account and on a discretionary basis on behalf of certain clients. Such trading interestsmay be contrary to the recommendations offered in this report.Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with companiescovered in its research reports. As a result, investors should be aware that the firm may have aconflict of interest that could affect the objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision.* This individual is a member of the Product Management Group and is not a Research AnalystAll research referenced herein has been previously published. You can view the full reports,including analyst certifications and other important disclosures, by clicking the hyperlinks inthis publication or by going to our Research portal on Barclays Live.FOR ANALYST CERTIFICATION(S) PLEASE SEE PAGE 31.FOR IMPORTANT EQUITY RESEARCH DISCLOSURES, PLEASE SEE PAGE 31.FOR IMPORTANT FIXED INCOME RESEARCH DISCLOSURES, PLEASE SEE PAGE 32.Global Portfolio Manager's DigestYields in FocusWe provide context and perspective on research acrossregions and asset classes, this week highlighting our updatedviews on the dollar amid the recent bond market moves; thecase for a bull run in oil prices; and the green transition inAPAC.• Bond Rout & the Dollar: A brief look back to the dollar depreciation since March reveals thatcurve steepening, especially at the ultra-long end, has captured USD swings accurately, in ourview. Historically, a steeper U.S. curve has coincided with a weaker dollar, and this link mainlyworked through expectations of Fed easing. The recent link, however, may further reflect riskpremia on U.S. policies. Regardless of the precise underlying dynamics, bond marketvolatility is creating an unfavorable market environment for the dollar. Shifts in rhetoric, andtrade policy mishaps or data softening, could all lead EUR/USD higher toward 1.15. That said,we do not see the dollar weakening sustainably beyond our forecasts. In fact, we worry that inthe medium term, EUR/USD 1.15 may be too high to be a sustainable equilibrium.• A Comeback for Oil Prices?: In our view, the wave of negative sentiment surrounding the oilmarket is misguided and short term in focus. Oil demand is continuing to surprise to theupside and, with refining margins at 18-month highs, we see this as indicative of underlyingfundamental strength. Further, OPEC+ spare capacity is now starting to fall, reducing below-ground inventory, and by 2027 the oil market risks facing limited levels of easily accessiblespare capacity. Nevertheless, near term, we accept that an increase in OPEC+ volumes back tothe market is set to ke