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Macro & Markets: The perfect soft landing is fading away
What happened last week. Stocks rose and bonds fell after the majority of economic data surprised on the upside. Business sentiment figures were better than feared in the euro area and wage negotiations moderated albeit at a high level. This does not seem to conflict with our baseline scenario that the ECB will cut its policy rate in June. In the US, job data suggest that growth concerns are overdone. The FOMC minutes and Fedspeak suggest that stronger-than-expected economic data mean that there is no rush to cut interest rates. This is bad news for bonds and can eventually turn out to be bad news for stocks if ... (full story)