The week begins on a positive note, which comes as no surprise to observers after a global +25Pts surge in US rates (from '2 yrs' to '30 yrs') on the eve of the weekend.

The highlight of the week will be the European Central Bank's (ECB) monetary policy meeting on Thursday, ahead of the Fed's meeting next week.

In view of Christine Lagarde's statements last Wednesday in Davos, the Frankfurt-based institute is likely to resist market calls for a rate cut as early as March.

Investors are likely to be disappointed", warns Christopher Dembik, Investment Strategy Advisor at Pictet AM.

"In the very short term, it is not in the ECB's interest to reveal too much about the date of the first rate cut and the pace of the easing process", he adds.

The week will also be punctuated by the PMI activity indices for Europe, due on Wednesday, followed by the first estimate of fourth-quarter US growth, due on Thursday.

On the bond front, US Treasury yields are easing a little: the US 10-year is down -5pts to 4.0950%, while its German equivalent, the Bund of the same maturity, is also down -4.8pts to 2.2470%, our OATs -4.5pts to 2.781%, and Italian BTPs -4pts to 3.8330%.

Inflation expectations could be rekindled with Brent crude recovering +1.6% to $79.3 a barrel in London.

The easing of rates is not benefiting gold (-0.3% to $2024) or silver, which is down -2.2% to $22.


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