A fine start to the week for bonds, with gains wiping out all the ground lost in the previous week.
It's hard to pinpoint a decisive factor, given the lack of macro news and the silence of central bankers.... yet optimism is making a strong comeback as the busy week unfolds, with an avalanche of leading indicators in addition to the Fed's decisions due on Wednesday (culminating this Friday in the NFP, or US employment report for January).
The US central bank has made it clear that it plans to cut interest rates in 2024, and the question now is when, by how much and at what pace.
The yield on T-Bonds 2034 fell by -6 basis points to 4.102%, while the '2-year' erased -3 basis points to 4.335%.

Powell should leave the door open to the possibility of a rate cut in March, while avoiding reinforcing the likelihood of such a scenario for the time being", says Jim Reid, market analyst at Deutsche Bank.

According to FedWatch, only 48.6% of traders now anticipate a rate cut in March, with 50.4% expecting a further 'status quo'.
In Europe, the week will be punctuated in the eurozone on Tuesday by the publication of GDP for the fourth quarter, followed by consumer prices in the region, due on Thursday.
Like US T-Bonds, yields are easing -4.5 basis points on our OATs to 2.7228% and -5pts to 2.233% on Bunds.
Italian BTPs are doing better with -6.5 basis points to 3.765% and Gilts dominate -for once- the ranking with -7pts to 3.915%

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