Optimism in the bond markets is back at its zenith (and yields at 6-month lows) just hours before the FED's 8pm statement.

This will be followed by the traditional press conference by FED Chairman Jerome Powell: the FED is expected to leave rates unchanged, a stance justified by the continuing slowdown in inflation, confirmed yesterday by the latest consumer price figures.

The yield on 10-year US government bonds is down -5pts at 4.155%, while the 30-year is down -4pts at 4.267%.

In the Eurozone, CVS industrial production figures show a contraction of -0.7% in the Eurozone and 0.5% in the EU (or -6.6% annualized), according to Eurostat, following declines of 1% and 0.8% respectively in September.
More specifically, production of capital goods fell by 1.4%, intermediate goods and consumer durables by 0.6%, while consumer durables rose by 0.2% and energy by 1.1%.
These are further signs of economic weakness, sending yields back towards their end-July lows.

The Bund is easing sharply (-6pts to 2.171%) following the sharp drop in industrial production in the Eurozone, our OATs are down -6.5% to 2.713%, and Italian BTPs are down -8pts to 3.9300%.
Here again, a "strong" sign of confidence in an "accommodating" speech by Christine Lagarde tomorrow.
Also noteworthy is a political agreement on the 2024 budget in Germany, which will avert a crisis situation... but not recession, as no stimulus measures can be implemented by increasing deficits (strict compliance with balanced budget rules).

The best performance of the day went - once again - to the British 'Gilts' with -10Pts to 3.8660%.

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