The week is not starting well on the interest rate markets with a deterioration of Treasury bonds on a broad front (USA and Euro zone).
The improvement observed on Friday evening on T-Bonds fizzled out:
the US ’10 year’ rose by +2.4 points to 4.451%, and the ’30 year’ took almost 4 points to 4.6390%, the worst level since the end of last May, the ‘2 year’ took +1.5 point around 4.316%.
The US ’10 year’ deteriorated this Monday to around 4.493%, the ’30 year’ beyond 4.676%… the correction seems likely to start again at any time.
The atmosphere is not calm in Europe with Bunds rising by +2.5Pt to 2.3740%, our OATs are evolving identically, at 3.103%, as well as Italian BTPs at 3.573%.
The week promises to be calm with few major indicators on the agenda, the main meeting being set for Friday with the publication of the European ‘flash’ PMI indices.
‘The themes which continue to concern the markets are now well known: on the one hand the effect of the election of Trump, the weakness of demand from China and the comments of disparate companies concerning the third quarter’, recall the Edmond de Rothschild teams.
The ‘Trump Trade’ – which carried Wall Street in the wake of the November 5 presidential election – seems to have run out of steam at the end of last week, which fueled a small wave of ‘risk-off’ favorable to the T- Bonds… but which obviously does not last (the Nasdaq-100 recovers +1%).
Investors fear that the ‘pro-business’ approach advocated by the real estate magnate will lead to a resurgence of inflation which could lead the Fed to slow down its rate cuts… or even not lower them at all. December 17/18 next (it’s a bit 50/50 now).
Finally, British ‘Gilts’ once again find themselves at the back of the pack with a deterioration of +4.5ts to 4.518%.
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