FED-AMENTALS ARE BACK
Edito Even in 2018, the fundamentals can return to the spotlight. After a September FOMC that went by unnoticed, Jerome Powell’s speech (still a long way from neutral rate) and the record increase in ISM Non Manufacturing (61.6 compared to 58 the month before) took the TNote to 3.2%. At these levels, the market should be driven by investors guided by their liabilities and the evolutions of their Equity/Fixed Income allocation. On this side of the Atlantic, policy continues to be the main theme, with some signs of things calming down. The outlines of the Italian budget seem to be taking shape through the twists and turns in its definition, and Theresa May dissipated the trends towards conspiracy over Brexit in her camp. Who would have thought that a few dance steps would have such an impact? Nonetheless, this progress still has to be confirmed and deadlines are looming.