UBS: Hike Expectations Overstated Amid Energy Shock

UBS analysts argue market expectations for policy rate hikes are likely overstated given recent bear flattening of G10 yield curves.
Two-year yields have risen about 40 basis points across G10 markets since February, driven partly by tighter policy expectations.
UBS trims UK GDP forecasts by 50 bps to 0.6% this year and 30 bps to 1.1% next year.
The firm expects Fed and BoE to delay cuts to neutral levels, not raise rates, as Middle East conflict persists.