All articles tagged with #bond rally
A weaker-than-expected jobs report has led to a rally in bonds, with the unemployment rate indicating a softer labor market, which is positive for interest rates. The bond market had already rallied before the report, and the overall reaction suggests that bad news for employment benefits bond prices.
European stocks stabilized near a four-month high as traders increased bets on central banks shifting towards rate cuts. The Stoxx 600 index rose for a second day, while US equity futures also advanced. However, Merck KGaA saw a 13% plunge after the failure of its Evobrutiniban trial, impacting the company's plans for a new blockbuster medicine. Bond rally paused after the US 10-year yield dropped below 4.2% on Tuesday. The rally was triggered by the European Central Bank's hawkish officials stating a significant slowdown in inflation. Weaker-than-expected US jobs data further supported the belief that inflationary wage pressures were easing, giving the Federal Reserve room to cut rates. The market is now fully pricing in six quarter-point rate cuts by the European Central Bank in 2024, with an almost 90% chance of an easing cycle starting in Q1 2023. However, some analysts warn that recent dovish commentary from central bankers may not be enough to warrant such optimism.