Last week was marked by the increase of 25 basis points in the key rates of the US and European central banks, bringing them to 5% and 3.75% respectively. As this was widely expected, investors were not caught off guard. In his speech, Jerome Powell hid behind the upcoming economic data in order to establish the way forward while insisting on the absence of rate cuts by the end of the year or even further monetary tightening if necessary. In this, the market is still taking the opposite view of the Fed and continues to anticipate rate cuts starting this summer.

The ECB, on the other hand, is sounding a slightly different note. While most of the work has been done, a few more rate hikes, certainly in the range of 25 basis points, are still expected before the start of a quantitative easing phase.

An employment report that does not help the Fed

Under these conditions, we had to wait for the publication of the US employment report to give some additional indications on the state of mind of the financial community. And they were not disappointed! The change in nonfarm payrolls for April came in at +253K vs. 185K expected for an unemployment rate down 2 points to 3.4%. In summary, U.S. employment remains particularly resilient, which does not help the Fed's case.

The bottom line: the US 10-year yield continues to consolidate flat within a narrow range of 3.63/3.31% while its German counterpart remains under bearish pressure below 2.55%. This Thursday, we can focus on the Bank of England's meeting, just to give investors a little bit of direction.

Taux