Yield curve changes, European economic data weak 🤔
The market continued Monday's bond duration demand, with the U.S. yield curve flattening in the mid- and long-term parts, with short-term yields rising by 6 basis points and long-term yields falling by 3 basis points; in Europe, the euro zone The PMI came in below expectations, with the manufacturing PMI clearly in "recession territory" (43), while accompanying commentary noted that "headcounts fell for the first time since the pandemic lockdowns in early 2021", sending yields lower and the ECB's quarterly lending survey It was pointed out that net demand for loans fell sharply due to falling fixed investment and rising financing costs.
Similar to the Fed, Eurozone interest rates appear to have peaked, and at subsequent ECB meetings, the focus will turn to balance sheet reduction.
