This morning, investors took note of the eurozone's annual inflation rate. It is estimated at 2.5% in June 2024, versus 2.6% in May, according to a flash estimate published by Eurostat, the European Union's statistical office.

German inflation figures, published a little earlier, came out slightly above consensus, while moving closer to the ECB's 2% target, giving traders hope of some pleasant surprises.

On the bond front, the 10-year Bund hardly reacted (and continues to trade at around 2.610% (+Base Pts), while the French OAT was better off with -1Pts at 3.3350%, i.e. a spread of around 72.5 points (10 less than 3 sessions ago).

With no US figures on Tuesday, attention was focused on the words of Fed boss Jerome Powell, who, along with Christine Lagarde, is taking part in the ECB's annual forum in Sintra, Portugal (the European counterpart to the Jackson Hole meeting held every year at the end of August in the USA).

Powell reaffirmed that, while inflation had made 'progress', its decline needed to be confirmed in order to 'give more confidence that price increases are slowing before we start easing monetary policy'.

The FED boss confirms that he is torn between the fear of cutting rates too quickly and the fear of waiting too long.

Yields on the 10-year T-Bond eased by -2pts to 4.44%, after hovering between 4.4600 and 4.4100%.

Despite the recent rise in yields from 4.25% on June 25 to 4.50% on Monday morning, investors believe there is a 70% chance of a Fed rate cut in September




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