(CercleFinance.com) - The central banks are silent, particularly the FED, with 1 week to go before the final FOMC statement of April 30 and May 1, but the markets are behaving as if the forthcoming announcements were to confirm that the first rate cuts will be postponed until early autumn.

The bond markets had begun to stall early in the morning, so we can't even invoke the "figures of the day", the US durable goods orders just acted as an aggravating factor.

The US 10-yr yield is up +5.5pts to 4.655%, while the 30-yr has tested the 4.80% mark (the annual record set on April 14) to settle at 4.785% this evening.

Rate tension was exacerbated in New York after the release of durable goods orders, which rose by 2.6% last month compared with the previous month, following a sequential increase of 0.7% in February (revised from an initial estimate of 1.4%).

Excluding the usually erratic transportation sector, where orders climbed 7.7% month-on-month, the Commerce Department reports that orders rose by just 0.2% in March.

In Europe, the day started badly and ended no better: Bunds soared +8.2pts to 2.588% (after opening at 2.5300%), our OATs +9pts to 3.0900% (worst score since November 27, 2023), Italian BTPs +13.6pts to 3.951%.
No obvious connection with Germany's Ifo business climate index. This climbed from 87.9 in March to 89.4 in April, above the 89 expected by Capital Economics, with increases in both the expectations and current conditions sub-indices.
Bunds broke through the 2.55% barrier at around 11:00 a.m., deteriorating to 2.594% by 4:30 p.m., before stabilizing at 2.585% by 7:00 p.m..

Such an evolution -without any major catalyst- betrays worries about the reawakening of inflation and uncertainty about future rate cuts by the FED and ECB.

Across the Channel, Gilts are limiting the damage: having ended Tuesday at 4.2700%, they saw their yield rocket to 4.40% (worst score since 10/29/2023) before calming down a little at 4.375%... that's still +10.5% higher, and the zenith of 4.55% on 10/22/2023 is fast approaching.

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