The upturn in bond prices seen on Wednesday has fizzled out, and sentiment on both sides of the Atlantic is once again bearish.

On this side of the Atlantic, the German Bund yield is up +2pts to 2.4910%, the OAT yield (+2pts) is back above 3.00%, with an intraday 'peak' at 3.029%, while BTPs are faring better, almost stagnating at 3.8800%.
In New York, the yield on US 10-year Treasuries rebounded by +4pts to 4.632%, close to the five-month highs reached on Tuesday, while the 2-year was again close to 5.00% (at 4.990%), and the 30-year hovered between 3.725 and 3.7500%.
The probability of a rate cut in June has fallen below 20%, and the consensus is just 40% for the end of July, with the best "chance" being September with 64%.

The day's US figures were mixed: the Philly Fed's robust manufacturing index climbed 12 points to 15.5 in April, its third consecutive positive figure and its highest level since April 2022... while the consensus was for a -1.5Pt decline.

The number of jobless claims remained stable at 212.000, whereas a slight weekly increase in claimants was expected (to 215,000).

Weaker economic signals with the index of leading indicators, which is supposed to foreshadow the evolution of economic activity in the United States, declining again in March (-0.3% to 102.4), announces the Conference Board, which sees this as a sign of slowing growth.
The ConfBoard describes the outlook for the US economy as "fragile" or even "recessionary", penalized by rising household indebtedness, high interest rates and persistent inflation.

In its view, growth should therefore tend to slow in the second half of the year, leading it to anticipate a deceleration in GDP growth in the second and third quarters.

Lastly, on the real estate front, following a 14.7% drop in housing starts announced the previous day, sales of existing homes in the US fell by 4.3% between February and March, to 4.19 million annualized and seasonally adjusted (SA), according to the National Association of Realtors (NAR).

The median sales price reached $393,500, up 4.8% year-on-year, and the inventory of unsold existing homes rose 4.7% to 1.11 million at the end of March, representing 3.2 months' worth of inventory at the current clearance rate.

'Although rebounding from cyclical lows, home sales are stuck because interest rates haven't made any major moves', explains NAR chief economist Lawrence Yun.
However, first-time buyers are making a small comeback... but the parenthesis has just closed, with the 30-year rate back above 4.73%.

The few weaknesses in the US economy are not impressing IMF boss Kristalina Georgieva, who is revising upwards the growth outlook for the United States, which is accumulating record debt.


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