Oil prices jumped to their highest level this year, with Brent prices climbing to $67, up almost 50% from the lows in Dec 2014. The jump has raised concerns that inflation may accelerate in the coming months.Fears that inflation will rebound strongly on higher oil prices may be overstated. Bond yields of some Asian countries have risen back to mid-2014 levels, even though oil prices are still some 40% lower from their 2014 highs.The collapse in oil prices since mid-2014 has been largely favorable for Asia. Inflation has eased to an average of about 2% from over 3% in the first half of last year. “We do not think Asia’s inflation will rebound significantly and any increase will be much less than the jump in yields would suggest.” – BofA Merrill Lynch
The material has been provided by InstaForex Company – www.instaforex.com