Yields rise as hot inflation data encourages Hawks: Markets over

(Bloomberg) – European stocks slid as euro zone bond yields surged on Tuesday as hot inflation reports raised the risk for the region’s central bank to fend off overwhelming price pressures. lan.

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The Stoxx 600 fell 0.3%, cutting a 1.7% gain in February, following reports showing rising inflation in France and Spain. U.S. contracts were range-bound after a solid day of gains in the tech-heavy S&P 500 and Nasdaq 100 on Monday.

Yields on two-year German government bonds rose as much as 9 basis points to 3.17%, their highest since 2008. Treasury yields rose, with the 10-year benchmark rising 4 basis points to 4. %.

The latest data set is likely to reinforce central banks’ resolve to continue raising interest rates to placate still-hot inflation and revive economies. French inflation rose to a record in February, while Spain’s inflation unexpectedly accelerated in February due to higher food and electricity costs, increasing pressure on the European Central Bank. Europe must raise interest rates more.

For the first time, the crypto market is fully priced in with the ECB’s 4% closing interest rate in February 2024. That compares with the 3.5% interest rate expected at the start of the year and will exceed the highs. for eurozone interest rates over the previous two decades.

US data on Monday further outlined the challenge the central bank faces. Pending home sales in January rose by the most since June 2020. Durable goods orders fell, but after accounting for the drop in shipping equipment, it rose more than expected. Orders with factories for business equipment also increased.

Traders are currently pricing US interest rates to peak at 5.4% this year, compared with around 5% just a month ago. Federal Reserve Governor Philip Jefferson staunchly backed the central bank’s 2% inflation target on Monday. A series of aggressive Fed speeches this month dented January’s gains across markets.

Read more: Traders treat the US economy like a balloon driven by many forces

Elsewhere, oil prices were set for a fourth straight month of decline as concerns about tighter monetary policy and rising inventories in the US overshadowed optimism about rising demand in China. . Gold headed for its worst month since mid-2021.

This week’s main events:

  • U.S. Wholesale Inventories, Conf. Consumer Confidence Board, Tuesday

  • China Manufacturing PMI, Non-Manufacturing PMI, Caixin Manufacturing PMI, Wednesday

  • Eurozone S&P Global Eurozone Manufacturing PMI, Wednesday

  • US Construction Spending, ISM Manufacturing, Light Vehicle Sales, Wednesday

  • Eurozone CPI, unemployment, Thursday

  • US Initial Jobless Claims, Thursday

  • Eurozone S&P Global Eurozone Services PMI, PPI, Friday

Some key moves in the market:


  • Stoxx Europe 600 was down 0.3% at 9:10 am London time

  • S&P 500 futures fell 0.1%

  • Nasdaq 100 futures drop 0.1%

  • Futures on the Dow Jones Industrial Average fell 0.1%

  • The MSCI Asia Pacific Index fell 0.4%

  • The MSCI Emerging Markets Index fell 0.5%.


  • Bloomberg Dollar Spot Index was little changed

  • The euro was little changed at $1.0619

  • Japanese yen fell 0.3% to 136.64 to the dollar

  • Offshore yuan rose 0.1% to 6.9510 per dollar

  • British Pound rose 0.2% to $1.2094

electronic money

  • Bitcoin drops 0.4% to $23,301.05

  • Ether drops 0.2% to $1,623.89


  • Yields on 10-year Treasuries rose 4 basis points to 3.95%

  • German 10-year yield rose 7 basis points to 2.65%

  • UK 10-year bond yield rose 5 basis points to 3.85%


  • Brent crude oil rose 0.7% to $83.06 per barrel

  • Spot gold fell 0.3% to $1,812.36 an ounce

This story was made possible with support from Bloomberg Automation.

–With support from Richard Henderson and Tassia Sipahutar.

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©2023 Bloomberg LP


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