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Macro & Markets: Appropriate adjustment
2024 has started with financial markets questioning the rapid increase in central bank rate cut expectations that was the name of the game in late 2023. As a result, longer yields have seen a clear rebound, with for example the German 10-year benchmark bond yield currently around 30bp above the late-December low. In the short end of the EUR curve, the terminal rate pricing on the forward curve has jumped from around 1.70% closer to 2%. On the face of it, the economic data flow has not really been strong enough to prompt a rethink of expectations. However, the market implied central bank rate path priced late last ... (full story)