As we’ve discussed over the past 2 days, the bond market remains stuck between a rock and a hard place. If things get worse in Ukraine, commodity prices stoke higher inflation which, in turn, puts more upward pressure on bond yields than the “risk-off” trade can offset. If things get better, the risk-off trade evaporates and yields rise faster than moderating inflation expectations can offset–at least in the short term. We’ve seen both scenarios play out in the past 2 days. Today’s version is the “risk-on” trade (lower oil prices, higher stocks and bond yields).