Weekly Market Commentary - 15 March 2024

This week has witnessed considerable volatility in government bond markets as traders tackled conflicting signals from the US economy. The monthly nonfarm payrolls report, released last Friday, showed a mixed picture, with strong job growth but rising unemployment and a noticeable slowing of wage inflation. This was seen as positive for the chances of a rate cut by the Federal Reserve before summer. However, a small but surprising increase in CPI was followed by an increase in producer price inflation, while consumer spending shows no signs of slowing. This adds weight to the argument in favour of keeping rates high, and US treasury bonds led other government debt lower.

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