Higher and higher like a hawk

Once again, the focus this week was on key rates with hawkish interventions on both sides of the Atlantic (Bullard, Guindos). The market is now pricing in three 50bp hikes by the Fed by July, and three 25bp hikes by the ECB by December. The curve flattening is t herefore back. Nevertheless, slopes are more volatile, and term premiums could well return quite quickly, with a Fed QT announced in early May. The real 10-year US yield has approached positivity and the Nasdaq remains fairly febrile . On the risky assets side, however, resilience remains strong overall, as does macro and micro newsflow (first Q1 corporate results in the US, European PMIs). Finally, the French elections are a tail risk that should not be overlooked (see our credit page and our Cross-Expertise p ublication ).