No major movements were to be expected on Monday, which was a semi-holiday in several European countries, and free of macro figures in the United States (a blank agenda on Monday): spreads rarely exceeded 2 basis points, except in the United Kingdom (+5 to +6 basis points).

On the other hand, the coming days will be busy, with the publication of a whole series of statistics in Europe, the most eagerly awaited being the European PMI indices due on Friday, which will tell us more about the economic recovery on the Old Continent.

Statistics will be rarer in the United States, although the minutes of the Federal Reserve's latest monetary policy meeting will be closely followed on Wednesday evening.

In recent weeks, the markets have only wanted to see the glass half-full, giving importance only to figures suggesting a slowdown in inflation (CPI), while ignoring the others (PPI and import prices, Sino-American tax war).

Traders only want to retain what points in the direction of further Fed rate cuts, overplaying the adage 'Bad news is good news' when it comes to employment or leading indicators.

The question now is: how long can negative macroeconomic news continue to support equity valuations?" asks Florian Ielpo, Head of Macroeconomic Research at Lombard Odier Investment Managers.

"It seems that lower interest rates are no longer enough to support the markets, which raises the spectre of potential pitfalls", warns the professional.
Bond markets start the week on a heavy note, with +2.5Pts on T-Bonds at 4.4450%, and the '2-year' rising +1.6% to 4.841%.

In Europe, our OATs and Bunds are +2Pts at 3.0290% and 2.5330% respectively.
Gold is approaching record highs at $2,420, while the dollar remains stable at 1.0870E, while Italian BTPs are off by only +1Pt at 3.817%.

The worst performance of the day goes to British Gilts, which are down +6Pts at 4.2150%.


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