Such moves, alongside weak demand at auction of U.S. 30-year bonds on Thursday is a reminder that sentiment in the world’s biggest fixed-income markets remains fragile at best and the sharp gyrations of recent weeks are far from over.
With the weekend approaching and investors keen to hold on to safe assets, given heightened uncertainty created by war in Israel, U.S. and European government bond yields were lower on Friday.
No doubt latest U.S. inflation data has revived worries of further tightening from the Federal Reserve, with markets pricing about a 40% probability of a rate hike in December, versus a roughly 28% chance seen before the CPI report.
French annual inflation was slightly higher than initially measured in September, at 5.7%, as higher prices in the energy sector outpaced easing price increases in the food sector as well as in services, data on Friday showed.
And the flip side to still relatively high inflation in the West is weak price pressures in China, the world’s No.2. economy.
A mixed batch of Chinese data on Friday that showed a narrowing slump in merchandise trade, and the persistence of deflationary pressures underlined the challenges policymakers face in trying to engineer a durable economic recovery.
