It was a classic 'waiting session' on the markets, particularly in the US, 48 hours before the FED's final statement.
T-Bonds start the week on a positive note, with -5pts to 4.6200%... the '2-yr' eases by 2.5pts to 4.975%: nothing spectacular and little volume to support expectations of Jerome Powell's 'dove' speech on Wednesday evening.

In Europe, conversations were animated by Moody's and Fitch's maintenance of the French debt rating... which is seen as an act of leniency on the part of the Northern countries, which are managing their finances soundly.

Following this decision - which was clearly favorable to our sovereign debt - our OATs nevertheless opened lower, with the 10-year at 3.074% versus 3.062% on Friday evening: we can't really call the decision by the 2 agencies a hat-trick.
As the hours went by, however, an upturn took hold, with our OATs easing -3.4pts to 3.028%, Bunds down -4.7pts to 2.5300% (German inflation stands at +2.2%), and Italian BTPs down -7.5pts to 3.815%.
Across the Channel, Gilts are in line with Bunds, with tensions easing by -4pts to 4.3290% after a long flirtation with 4.40% on Thursday and Friday.

Although most European markets will be closed on Wednesday for the May 1st holiday, the week's economic agenda looks set to be a busy one, culminating in the Fed's monetary policy meeting, which will deliver its policy decisions on Wednesday evening.

No rate changes are expected on this occasion, but investors will once again be looking to Jerome Powell, who may be hardening his tone on inflation.
The latest price indices - including the famous PCE - in the United States have rekindled fears of a later-than-expected monetary easing by the Federal Reserve, which may not materialize until November.
The big news of the first 4 months of the year is the week-by-week evaporation of expectations of rate cuts (from 7 to... potentially zero) over the course of 2024, with a rate hike even garnering 33% of votes for January 2025.

Employment figures, due out on Friday, could also testify to the strength of the US economy, with 250,000 jobs expected to be created in April, compared with 303,000 in March.



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