The bond market is consolidating on a Thursday marked by the publication of inflation figures in Europe and the US, which are in line with expectations and seem to illustrate a "fait accompli".

The yield on 10-year US Treasury bonds is back up +5Pt to 4.32%, after testing a new low since September at 4.24700%.
The US Commerce Department announced that the 'PCE', which is closely watched by the Federal Reserve, had decelerated from -0.4% to 3.00% in October year-on-year... but the 'core PCE' index was up +0.2% sequentially (compared with September), with 'services' prices remaining unchanged.

In addition, US household income and spending rose by a joint +0.2% in October, a month marked by a slowdown in consumption over the 2nd fortnight, but purchases rebounded nicely with Black Friday.

Lastly, weekly jobless claims rose by +7,000 to 218,000.

In Europe, investors took note of the preliminary figures for consumer prices in the eurozone for November: this is estimated at 2.4%, marking a clear slowdown after 2.9% in October, according to the flash estimate published by Eurostat, the European Union's statistical office.
In terms of the main components, food, alcohol and tobacco should see the highest annual rate in November (6.9%), followed by services (4.0%), industrial goods excluding energy (2.9%) and energy (-11.5%).
In Italy, inflation even fell below the 1% mark (to +0.8%, the lowest in 30 months), but this is not a good sign for the health of the economy.

In terms of GDP, France - like Europe and Germany - slipped into negative territory with -0.1% in Q3, and consumption fell by -0.9% in October, which puts the positive aspect of -0.5% inflation into perspective: this is the sign of a shrinking economy, and in this context, companies will no longer have the pricing power from which they benefited in 2022.
Despite this scenario, our OATs have rallied by 3pts to 3.0250%, Bunds by +3pts to 2.4550%, Italian BTPs by +5pts to 4.222%.

Ps better in the UK, where Gilts are the worst performer with +8.5 basis points to 4.211%.

Note the downward turn in oil, which has fallen by -5% in a straight line since 4:15 pm, with WTI dropping from $79.3 at 4:15 pm to $75.3 at 5:30 pm... a welcome relief for bond markets in view of the risk of a rebound in oil prices in connection with the Opec meeting in Vienna.

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