Bassanese Bites: CPI taper test – June 07 2021 –
Global equities ended last week up modestly, and appear to be back in the “bad news is good news” frame of mind. Stronger than expected U.S. manufacturing and service sector indices set markets back early last week, though stocks then rallied strongly on Friday following a (still strong, but) weaker than expected U.S. payrolls report. Indeed, U.S. jobs lifted 559k in May (market 671k), which the market took to mean that any risk of ‘taper talk’ at next week’s Fed meeting has been effectively quashed. U.S. 10-year bond yields eased over the week to 1.55%, to be at the lower end of their sideways range since early March. Oil prices marched higher, with OPEC agreeing to keep a tight reign on production at least for a while longer.