1327 GMT - The yield curve is a simple market indicator for central banks' credibility when they are facing mounting inflation risk, MFS Investment Management's Benoit Anne says in a note. "When the curve flattens in the context of rising inflation risks, typically this would be associated with a credible inflation-fighting central bank," the head of market insights says. The yield curve flattens when market participants anticipate short-term rates will rise and believe that inflation will be kept under control, implying that long-dated yields won't rise as much, he says. The curve tends to steepen, however, when the central bank is perceived to be less credible at fighting inflation, causing long-dated yields to rise more.