Just as falling oil prices are lending a helping hand to central bankers in their fight against inflation, central bank officials are hinting more strongly at rate hikes. Does this mean that central banks’ patience with too high inflation is running out? In this report, we examine this issue and what it means for the three-month EURIBOR and SOFR, as well as European and US long-term yields.

The widening of the yield spread between French and German government bonds, the rise in credit spreads and the recent fall in long-term yields are all interlinked. In this report, we analyse the nature of these links, the outlook for the coming months and quarters, and what this means for key European and US interest rates.

In recent weeks, some cracks have appeared in the AI bull market, but there are several reasons why equity markets could rise somewhat further in the coming months. More importantly, it is becoming increasingly clear why the current bull market is on its last legs. At some point in the coming months to quarters, we expect a regime shift to a fundamentally different market environment.