Bond markets are experiencing a sudden upturn, while US indices are starting to take a nosedive, with the Nasdaq in particular dropping -1.6%.

In Europe, on the other hand, the hypothesis of arbitrage in risk-off mode does not yet seem relevant, with indices such as the DAX40, CAC40 and AEX stuck at their absolute highs.

This has not prevented our OATs from easing by 8pts to 2.787%, Bunds by -7.7pts to 2.3200% and Italian BTPs by -12pts to 3.700%.

The 'figures of the day' were rather reassuring on the inflation front: industrial producer prices fell by 0.9% in January in the Eurozone and the EU, according to Eurostat, following declines of 0.9% and 0.8% respectively in December 2023.
On an annualized basis, this gives -8.6% in the Eurozone and -8.4% in the EU, slightly less marked declines than the 10.7% and 10% respectively seen in December.
Also in the Eurozone, the HCOB composite PMI index rose from 47.9 in January to 49.2 in February, reaching its highest level for eight months and indicating that overall activity is moving closer to stabilization.

In France, the HCOB PMI composite index of overall activity reached its highest level for nine months, rising from 44.6 in January to 48.1 in February, highlighting signs of recovery in the French economy.
On the other hand, production in the manufacturing industry declined 'sequentially' (-1.6% after +0.5% in December 2023) and in total industry (-1.1% after +0.4%), according to Insee's CVS-CJO data.

In the U.S., traders are awaiting further clarification from Jerome Powell, who will speak tomorrow.
Investors will also be keeping an eye on political news in the U.S. on the crucial day known as 'Super Tuesday'.

The victories of Joe Biden and Donald Trump are widely expected in their respective camps, which means that both candidates should logically meet again in the presidential election scheduled for November 5.
In any case, T-Bonds seem to be benefiting from a risk-off climate on the technos, and the yield on the 10-year has eased by -7.5pts to 4.1450%, i.e. -15pts compared with last Tuesday.
The easing is a little less marked on both the 30-year (-5.5pts) and the 2-year, with -4.8pts to 4.2900 and 4.5600% respectively.

Tuesday was also rich in "US stats", with in particular the "anticipated activity" indices: the ISM services index contracted to 52.6 last month, compared with 53.4 in January, whereas economists were expecting it to be around 53, according to the Institute for Supply Management.
On the other hand, the activity sub-index, which measures production, improved to 57.2 from 55.8 in January, while the new orders sub-index rose to 56.1 from 55 the previous month.
The employment sub-index, on the other hand, fell to 48 from 50.5, as did the ISM prices paid index, which dropped to 58.6 from 64 in January.
The 'S&P Global PMI' for the US private sector (a 'cousin' of the ISM) is revised upwards in the 2nd reading, to 52.5, from 51.4 in the flash estimate, and from 52 the previous month.

The 'S&P Global PMI' points to a recovery in manufacturing production... a trend partly contradicted by a -3.6% fall in industrial production in the US in January.

Across the Channel, Gilts erased -7.6pts to 4.0480% and participated in the general easing of rates... which may be linked to the surge in Gold, which set a new all-time record at $2,140 (before falling back below $2.130): Treasury bonds and precious metals are safe-haven investments when uncertainties loom on the horizon... or when markets anticipate central banks printing more money.



Copyright (c) 2024 CercleFinance.com. All rights reserved.