After 3 sessions of heavy trading, the bond markets ended the week on a positive note, with a fall in yields keeping sovereign debt from ending the week in the red.
Bunds, for example, erased -8pts to 2.355%, i.e. -4.5pts over the past week.
In today's statistics, Germany's GDP fell by 0.3% in volume terms in the fourth quarter of 2023 compared with the third quarter, according to CVS-CJO data from the Federal Statistics Office, which confirms its first estimate published on January 30.

Germany's Ifo business climate index for February edged up from 85.2 in January to 85.5 in February, a rise 'entirely attributable to an improvement in the expectations component', according to Capital Economics (business leaders are openly expecting a rate cut in the second half of 2024).

Other bond markets have also seen a real improvement, although stock markets remain in risk-on mode, with a new deluge of stock market records on Friday.

Still in Europe, our OATs are down 8pts at 2.8260%, while Italian BTPs are down 11.5pts at 3.802%.
Across the Channel, UK Gilts are once again moving against the tide, with a +3 basis point decline to 4.146% to round off a bad week (up +3 basis points on the weekly, it was all down to Friday).

No market movers in the U.S., and T-Bonds also seem to be benefiting from technical buybacks, with a spread that seems to be in line with Bunds and OATs, i.e. -8pts to 4.245%.

But the figures published the previous day had no impact, and their absence is not preventing T-Bonds from finishing the week well.

According to Christopher Dembik, economist at Pictet, 'Nvidia's excellent results are certainly much more important for the short-term trajectory of the stock market than any statistics or central bank decisions. The perceived economic downturn at the end of 2023 does not seem to be an issue for investors'.


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