New Fuel for the Bond Rally as Data Fans Rate Bets – Europe Market Wrap

European bonds rose alongside shares as inflation data Tuesday poured fuel on a surge driven by expectations that central banks will expedite interest rate cuts.

Yields on 10-year German bonds fell by much to 7 bps to their lowest level since January, as Euro-Area inflation dipped below ECB’s 2% objective for the first time since 2021. Rates traders are beginning to believe that ECB will drop interest rates for the third time in a row this month.

ECB’s President Lagarde stated that the bank is becoming more optimistic about bringing price pressures under control. The Stoxx 600 gained 0.3%. Contracts for the S&P 500 were little changed after the gauge set a new record Monday with its fourth straight quarter of advances, the longest such winning streak since 2021. Treasuries advanced.

ZIM Integrated Shipping slumped up to 4.9% in premarket trade as dockworkers walked out of every major port on the US East and Gulf coasts, signalling the start of a strike. FedEx and UPS rose after Stifel indicated they would benefit the most from the strike’s delays.