European stock market indices continue to pile up record highs (CAC40/SBF-120) or hold firm (E-Stoxx50, DAX40): capital flows continue to be sucked in by tech, luxury goods and Air Liquide on Tuesday February 20.
Equities ('risk-on') have been rising, Treasuries ('risk-off') falling for the past 6 weeks: it's a fairly classic pattern, underpinned by the feeling that central banks are in no hurry to cut rates, while the latest US figures (CPI and PPI) are fuelling renewed concerns about the level of inflation in 2024.

Important technical resistance levels (in terms of yield) were crossed 10 days ago (with the publication of the US CPI), and today's slight easing does not allow us to go back below the "pivot levels" tested at the beginning of December 2023.
The US bond markets seem to be benefiting from the beginnings of consolidation on the Nasdaq and the champions of the "I.A champions (with their stratospheric valuations): the yield on 10-year Treasuries has eased this evening by -4pts to 4.258% (after +50pts since the start of the year).

The fall in yields is flirting with -3.5PPts in Europe, with Bunds at 2.376% and OATs at 2.8500%, while Italian BTPs have eased -4pts to 3.863%.

The improvement is a little marked across the Channel, with Gilts erasing -6.5Pts to 4.0850... after having fallen +15Pts since February 8 and +60Pts since January 1.

In terms of figures, the construction sector rebounded by +0.8% sequentially and +1.9% year-on-year in the eurozone in December, after two consecutive months of contraction, according to Eurostat (the European Union's statistical office).
But analysts at Capital Economics say they expect the construction sector to experience a bout of weakness this year, after the highs reached last spring.
We expect construction to decline again in 2024, mainly as a result of Germany's poor performance", stresses the London-based economic research firm.

In the USA, the Conference Board's index of leading indicators showed a decline of -0.4% (22nd consecutive month of decline), but this was "not as bad as expected", with 6 out of 11 business sectors on a positive trajectory.

As a result, the Conference Board says it no longer anticipates a US recession this year, but warns that growth will slow to near-zero levels in the second and third quarters.

In China, stock markets were slightly buoyed by the announcement of a 25 basis point cut in the prime lending rate for loans of more than five years, on which many lenders base their mortgage rates.

Beijing hopes that this sharper-than-expected reduction will invigorate the credit and property markets, reduce financial costs for companies and individuals, and contribute to economic recovery.



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