A roller-coaster session for bonds, with T-Bonds continuing their upward trend (symmetrical fall in yields to 4.385% for the US '10-yr') until mid-day, but reversing the trend with the '2033' T-Bond up +2pts to 4.462%, while the '2-yr' climbed +5pts to 4.892%.

The week remains largely positive, with the '2033' easing by -18pts.
Investors are now clearly betting - since Tuesday's inflation figures - that the monetary tightening cycle of the major central banks is coming to an end.
But the slowdown in inflationary pressures has not totally reassured them.

It's clear that the central banks' battle against inflation is far from over," says Thomas Hempell, economist at Generali Investments.
"Rates are likely to remain at their current levels in an extended pause - with the first rate cuts unlikely before the second half of 2024," the analyst points out.

The economic data released this week were mixed, but traders focused on the moderation in inflation (some components of which recorded a downturn bordering on the inexplicable).

In terms of figures, the Commerce Department reported a 1.9% rise in US housing starts in October, to an annualized rate of 1,372,000, a level rather above economists' expectations.

Similarly, U.S. housing permits - thought to be a precursor of future starts - rose by 1.1% to 1,487,000 annualized last month, also exceeding consensus.

No market movers and insignificant spreads in Europe, with Bunds at -0.5Pts (2.5830%) and Italian OATs and BTPs totally stable at 3.418% and 4.348% respectively (the week ended with an average easing of -15Pts).

Copyright (c) 2023 CercleFinance.com. All rights reserved.