Bond markets seem to have reassured themselves this Tuesday: yields are easing by -3 to -4.5 basis points on both sides of the Atlantic.
T-bonds '2033' are down from 4.2400% to 4.2100%, Bunds from 2.2650% to 2.2200%, our OATs from 2.818% to 2.7730%... and Italian BTPs are down -6Pts to 3.995% (back below the symbolic 4.000% threshold).

The US price index was potentially the most important figure of the week, but the US CPI is proving to be a fine example of a non-event.

Inflation, which stagnated as expected in November, suggests a more accommodating approach on the part of the major central banks: the day's inflation figures are deemed rather reassuring and in line with expectations.
The core index is stable at 4.00%, while the gross CPI stands at 3.1% (+0.1% in November).
Following these figures, investors estimate the probability of a quarter-point rate cut in March at around 44%, according to CME Group's FedWatch barometer, compared with around 42% yesterday.

The FOMC is expected to leave interest rates unchanged tomorrow, but its statement could provide some valuable clues as to its rate intentions.

Note, however, that housing costs are continuing to rise, a component that is closely watched by analysts: this increase is linked to the drying up of supply, as no one wants to borrow again at 7% after having been able to buy with a mortgage rate of 3.5% 2 years ago.
So, there are no more sellers, and the solution for solvent buyers is to build a new home.


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