Bunds extend losses after US data. The German 10-year rate is now up 8 bp on the day at 2.18%, while the UK Gilt yield has lifted 7 bp to 3.79%. Both jumped higher through the first trading week of the year as markets scaled back excessive rate cut bets. Inflation nudged higher again at the end of 2023, backing central bank warnings inflation rates won’t continue to fall as rapidly as it did at the start of the last quarter. Better than expected US jobs data today further undermined the chances of quick rate cuts from central banks in Europe and the US. Stock markets continued to sell off with bonds and DAX and FTSE 100 are down -0.5% and -0.6% respectively on the day, and the DAX is heading for a more than -1% decline through the first week of the year.
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Andria Pichidi
Market Analyst
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