Macro: Sandcastle economics
Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.
Head of Fixed Income Strategy
Economists anticipate the CPI report for March to reveal a 0.3% rise in consumer prices on a monthly basis, a slight decrease from the 0.4% growth observed in February. However, the annual inflation rate is expected to rise from 3.4% to 3.2%. This anticipated uptick in annual inflation signals ongoing inflationary pressures within the economy, albeit at a slightly slower pace month-on-month.
Yet investors have to bear in mind that breakeven rates are rising together wutg cinn and have hit the levels seen in November last year.
The uptrend in ten-year yields persists, supported by a lack of divergence in the Relative Strength Index (RSI), suggesting a probable ascent to challenge resistance at 4.5%. In case of better-than-expected CPI numbers yields may to drop to test support at 4.4%.
The 2-year US Treasury yield continues its upward trajectory, bolstered by a positive sentiment reflected in the Relative Strength Index (RSI). Anticipating an increase in the Consumer Price Index (CPI), there is potential for the 2-year yields to ascend further, possibly testing resistance at 4.9%. Conversely, if the CPI surprises on the downside, it may prompt a retreat in yields, testing the 200-day Simple Moving Average (SMA) at 4.69%. Nevertheless, we maintain the view that a significant drop below 4.49% is improbable, thus affirming the persistence of the uptrend.
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