Weekly Market Commentary - 15 January 2024

This week US headline inflation came in stronger than expected. A rise was on the cards but the increase was a bit bigger than forecast as higher energy and housing costs pushed inflation back up. Counter intuitively, particularly after the weakness in bond markets last week, US government bonds rallied slightly as markets looked past one inflation reading to focus on the bigger picture. Bond markets still clearly see rate cuts coming soon and it is going to take something more substantial than a single inflation print to shift opinion.

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