The slightest pretext for seeing the glass as half full is used to euphorize the markets.

In the USA, the CPI (US consumer price index) is in line with expectations... but operators feared that "it could be worse".
In Europe, inflation projections are (slightly) revised downwards, and this is "in the right direction"... all the more so as this announcement was not foreseen (favorable surprise effect).

Inflation in the USA came out perfectly in line with expectations, and in all its components: the CPI slowed slightly -as expected- in April (deceleration 0.3% vs. +0.4% in March) to stand at 3.4% over 12 months, after a score of 3.5% in March.

The 'Core' underlying CPI index (excluding energy and food products) rose by 0.3% month-on-month, against a 0.4% increase in March and a consensus of 0.3%, to stand at +3.6% year-on-year after a 3.8% rise in March.

These figures tempered concerns about the acceleration in producer prices, but did not completely dispel Jerome Powell's call for patience on Tuesday, as inflation will take some time to resume its decline towards the 2% mark.

The yield on 10-year US Treasuries eased sharply, down -8.2pts to 4.365% (the '2-year' erased -7pts to 4.75%) after the publication of the US inflation report.

It was a day of 'unsurprising numbers', as industrial activity contracted again in May in the New York region, albeit by a token amount: the New York Fed's Empire State index came in at -15.6, compared with -14.3 last month.

The new orders sub-index deteriorated to -16.5, from -16.2 in April, as did the number of employees component, which came in at -6.4 after -5.1 last month.

US retail sales were flat on a sequential basis in April, at $705.2 billion, although the slowdown in consumption across the Atlantic is tending to be confirmed, and this also reassures on the inflationary outlook.

Still on the statistics front, but in Europe this time, CVS GDP during the first quarter of 2024 rose by 0.3% in the eurozone and the EU, compared with the previous quarter, according to the flash estimate published by Eurostat, the European Union's statistical office.

Furthermore, in March 2024, seasonally-adjusted industrial production rose by 0.6% in the eurozone and by 0.2% in the EU, compared with February 2024, according to estimates by Eurostat, the statistical office of the European Union

On the European bond front, the yield on the German Bund with the same maturity fell by 11pts to 2.43%, our OATs by -12pts to 2.928%, and BTPs erased -15pts to 3.735%: it was the best day for our Treasury bonds since January 31.

Quite logically, given the fall in bond yields, gold has climbed back up to $2,380/Oz.

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