February 3, 2025
United States:
Bond Traders Warn of Inflation Shock as US Yield Curve Flattens
US bond markets are flashing a warning to US President Donald Trump that his move to unleash tariffs on top trading partners risks fueling inflation and stymieing growth.
Short-end Treasury yields rose as much as eight basis points to 4.28% on Monday as longer-dated rates held steady, flattening the curve by the most since November.
Europe:
Euro-Zone Inflation Unexpectedly Quickens, Backing ECB Caution
Euro-area inflation unexpectedly accelerated, supporting the European Central Bank’s cautious approach to lowering interest rates while the sputtering economy faces intensifying trade threats from the US.
Consumer prices advanced 2.5% from a year ago in January, up from 2.4% in December and more than the stable reading predicted by economists, Eurostat said.
Asia:
China Factory Activity Growth Slows Again as Trump Tariffs Loom
China’s manufacturing activity unexpectedly declined for a second straight month in January, underlining the need for Beijing to step up economic stimulus with Donald Trump slapping tariffs on the country’s exports.
The Caixin manufacturing purchasing managers index fell to 50.1, the lowest in four months, from 50.5 in December, according to a report released by Caixin and S&P Global on Monday.
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