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Bond market more rational than stock market: Impact of the problems in the Red Sea on inflation and speculation on key interest rate cuts.
According to a report from www.stockstreet.de, ING Bank recently published that the problems in the Red Sea could affect supply chains and delivery costs. This leads to higher costs and longer delivery times, which could also have an impact on inflation. However, research by the European Central Bank shows that the impact on inflation could be less than initially thought. At the same time, expectations of interest rate cuts have decreased, which is particularly evident in the bond markets. The 10-year U.S. Treasury yield appears to be stabilizing, which could indicate that speculative moves are easing. The Bund future is expected to move sideways. …
Bond market more rational than stock market: Impact of the problems in the Red Sea on inflation and speculation on key interest rate cuts.
According to a report from www.stockstreet.de,
ING Bank recently published that the problems in the Red Sea could affect supply chains and delivery costs. This leads to higher costs and longer delivery times, which could also have an impact on inflation. However, research by the European Central Bank shows that the impact on inflation could be less than initially thought. At the same time, expectations of interest rate cuts have decreased, which is particularly evident in the bond markets. The 10-year U.S. Treasury yield appears to be stabilizing, which could indicate that speculative moves are easing. The Bund future is expected to move sideways. Despite the record highs of the stock indices in the USA, expectations of interest rate cuts remain low. The bond market currently appears more rational than the stock market.
Based on this information, the stabilization of the 10-year US Treasury yield could lead to interest rate expectations slowly stabilizing and excessive speculation decreasing. This could lead to increased stability in the bond markets and support the expected sideways trend such as the Bund future. In addition, the reduced expectation of interest rate cuts could have an impact on the market, causing prices to move into an expected sideways or moderate upward trend. The rationalization of the bond market relative to the stock market could continue to result in increased stability and offers potentially rewarding short speculation on the Bund future.
However, it is important to continue to monitor market movements closely as various factors can impact future developments.
Sources: www.stockstreet.de
Read the source article at www.stockstreet.de