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Inflation and interest rates drive the markets
The market probability on a ECB rate cut by April has risen to around 100%.
Out overnight, January UK BRC shop price index fell to a 2-year low of 2.9% y/y vs 4.3% in December.
Key focus is on the FOMC decision tomorrow and to what extent, if any, the Fed pushes back on market rate cut expectations.
10-yr 4.068%
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WSJ – A Little Dual Easing Soon Could Help the Fed Avoid Major Easing Later
Federal Reserve policymakers are considering when to start cutting rates, when to slow down the pace of quantitative tightening – By Justin Lahart, Jan. 29, 2024Treasury
Treasury Announces Marketable Borrowing Estimates | U.S. Department of the Treasury
4 hours agoBloomberg.com
US Treasury Cuts Quarterly Borrowing Estimate to $760 Billion
4 hours agoReuters
US Treasury to borrow $760 billion in Q1, lower than October forecastpeople can also do equities and wait for low priced bond markets too. it just depends on what they wanna do as bond markets got something for everyone.
Gotta love the CB’s (FED, RBI) problem is can’t decide which one to love more. =)
toddlers feed both parents with all the fruits but when they get a tub of ice cream they say nooo!! ice cream is bad!!! and eat the whole thing!!
January 29, 2024 at 7:35 pm #947
Why don’t they like big badanna companies?
If fed decides to cut rates then nows the time to go into equities as a matter of fact the next theme for me is equities, and whoever bought bonds/papers and kept at it from 2022 onwards till now has more than enough capital to finance their possies, they got the 1% of equity they need from bonds… That 1% rule originated from the time of low priced bond markets of the 70’s-80’s.
And like I said before the american markets are mirroring indian markets from 2022-2023 onwards, only for a longer period of time… First a DCB then launching into rocket mode but those will be few and scattered throughout then back into bond rallies with even more astronomical rates. Since murricans don’t like 5.75% as I have forecasted last year then 11-13% is acheivable over a period of time provided bonds keep on dropping then jumping which will get them closer and closer to those levels but in order to do that it’s safer to get into some equities and let the bonds cook on the back burner for some more time. It’ll take time but bond buyers will get the rates they want whether it is 5% or 11% or even 1%…
If they don’t want low bond rates then it is better to not buy them at all.
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AnonymousQuiet day ahead of this week’s storm of events.
Focus today has been on risk of rising Middle East tensions but so far limited reactions.
Market focus is on interest rate expectations and timing of rate cuts (note EUR soft tone after there was no pushback on market expectations of an early rate cut).
Busy Week for Bonds Won’t Make Things Any Clearer for Traders
– (Bloomberg) — Bond traders looking for something to jolt the $27 trillion Treasury market out of its recent rut will probably still be left waiting for answers, even after a busy week packed with a Federal Reserve meeting, the government’s quarterly debt-sale plans and a slew of economic data.jolt would be nice, maybe even exciting
Next week we have quite a few data’s , the most important be FOMC rate decision.
Check it out in our Economic calendar -
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