The dollar has benefited little from the day's figures, and appears to have stabilized at around +0.2% (Dollar-Index at 103.60), while the rise in US Treasury yields has been spectacular.

With the very robust US figures published on Wednesday, the scenario of a rapid rate cut by the FED (at the end of March) is receding: the consensus, which was over 77% before the weekend, was down to 63% according to the FedWatch barometer on Tuesday evening.
It should fall below 50 with the series of stats published at 2.30 p.m.

T-Bonds had their worst day since mid-December: the 10-yr yield rose by +3.4pts to 4.1010 (it got worse, reaching 4.13%), the 2-yr yield rose by +14pts to 4.3600% (it got worse as the hours went by on Wednesday)... bringing it back to its December 21-28 levels.

US retail sales continued to grow solidly in December in the United States: the Commerce Department reported a 0.6% rise last month, whereas economists were only expecting a 0.4% increase.

And year-on-year, the increase at the end of December came to 5.6%, well above the estimated 5.1%.

In detail, retail sales were buoyed by purchases of automobiles (+1.1%), clothing and accessories (+1.5%), but also by those made in department stores (+3%) over the Christmas period.

Excluding automobiles and fuels, retail sales rose by a further 0.7%, as in November.

Industrial production also came as a surprise: in total contradiction with the New York Fed's Empire State index published on Tuesday (which showed a sharp decline, and was even the lowest since May 2020), the Federal Reserve reported an unexpected increase of +0.1%, thanks to the strong performance of consumer goods manufacturing.

In detail, production of consumer goods rose by 0.2%, while that of raw materials rose by 0.1%.

Production in the mining sector rose by 0.9%, while that of utilities companies fell by 1%.

The industrial capacity utilization rate stood at 78.6%, unchanged month-on-month.

Sterling stood out, gaining ground against all currencies (+0.2% against the $, +0.4% against the Euro): here again, the yield effect explains everything: the yield on Gilts exploded by +22pts to 4.022%, after publication of UK consumer prices (ONS figures), which rebounded to +4% (this would be the result of some 'adjustments' to calculations on various inflation components.... unless this restores the end-2023 figures to reality).

Annual inflation in the eurozone was also on the menu, and no nasty surprises: it stood at 2.9% in December 2023 according to Eurostat, versus 2.4% in November (1 year earlier, it was 9.2%), the 0.5% rebound expected with 'base effects' becoming less favorable.

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