Interest rates across the Atlantic are under heavy pressure, following a "bright red" week which saw a spectacular reversal in investors' expectations of the monetary easing favored since late November.

The tension of the last 48 hours is reinforced by the jump in the Michigan confidence index of +9pts to 78.8 this month, the highest since July 2021, whereas economists were forecasting a much less pronounced rise to around 70.
The US '10-yr' is still down +2.5Pts at 4.1700%, or +25Pts over the past week, and the worst weekly performer since mid-October 2023, the '2-yr' is down +4Pts at 4.397%, or nearly +27Pts over the week.

The Michigan index now stands at just 7% of its all-time high reached in 1978.
The survey component measuring consumers' judgment of the current situation reached 83.3, compared with 73.3 the previous month, while that measuring their expectations rose to 75.9, after 67.4 in December.
One-year inflation expectations measured by the survey fell back to 2.9%, the lowest since the end of 2020, thus returning to the historical range of 2.3% to 3% that prevailed before the Covid epidemic.

In Europe, on Wednesday, market participants had to digest a "hawkish" speech by Christine Lagarde, who spoke of a "probable" decline in June.

These statements led to a clear downward revision of interest-rate expectations: after a tension of around 15 points, Bunds and OATs froze at their highest levels of the week at 2.31% and 2.83% respectively.... and Italian BTPs are easing by -3Pts to 3.87%.
British Gilts will end the week at their lowest, with a tension of +2Pts to 3.952%

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