After one of the worst bond market sessions since October 2023, US short-term yields jumped +15 points to 4.62% (from 4% at the end of December 2023), triggering a slight upturn.

This surge was caused by the publication of a less favorable CPI than expected (3.9% core rate instead of 3.7% annualized).

After breaking through 4.315% on Tuesday evening (the worst level since early December), US 10-year T-Bonds eased back slightly (-5pts), to around 4.267%, while German Bunds of the same maturity eased -4pts to 2.3400%. Our OATs eased -6pts to 2.835%, while Italian BTPs eased -11.5pts to 3.850% (the improvement accelerated in the early afternoon).

The probability, according to market participants, of a first FED rate cut as early as next month fell sharply, to 8.5% from 76.9% a month earlier, according to CME's Fedwatch survey.

For Christopher Dembik, Investment Strategy Advisor at Pictet Asset Management, this publication was a good excuse for investors to catch their breath and take some profits after a very solid start to the stock market year so far.

We doubt, however, that this will call into question the good momentum in equities that has been underway since the start of the year", the analyst moderates.

"We must refrain from over-interpreting yesterday's statistics", he stresses. The disinflation process is still well underway on the other side of the Atlantic", the professional reminds us.

On the 'macro' front, Eurostat, the European Union's statistical office, reports that CVS industrial production rose by 2.6% in the eurozone and the EU between November and December 2023.

Industrial production rose by 20.5% for capital goods and fell by 1.2% for intermediate goods in the eurozone.
As a reminder, in November 2023, industrial production rose by 0.4% in the eurozone and by 0.5% in the EU.

The new estimate of eurozone GDP for the fourth quarter is identical to the initial figure, with stagnation at around 0.00%.

Finally, across the Channel, UK Gilts are easing by -7.5pts to 4.08%.

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