On Friday, interest rates on government bonds fluctuated slightly. In the US, the yield on the 10-year Treasury note rose by 3.1 basis points to 4.185 percent. In Europe, the German 10-year government bond’s interest rate was higher by 3.2 percentage points at 2.382 percent, while the British one was higher by 3.3 percentage points at 4.078 percent, and the Italian one was higher by 3.9 percentage points at 3.961 percent.
Meanwhile, the US published revised figures on annual development of inflation for December. The monthly inflation rate was corrected from 0.3 percent to 0.2 percent, but for the last quarter of the year, figures remained unchanged with an annual rate of rise in prices at 3.3 percent.
Rabobank analysts commented on these developments stating that it could have significant implications for the Fed as it could both increase and decrease confidence that the bank has made inflation fall sustainably towards its two percent target.” Appropriate inflation corrections announced a year ago still remained in investors’ minds as they partly renewed expectations about return of inflation.” This time around, numbers were not expected to significantly change market expectations although publication caused slight rise in stock futures and drop in government bond yields before rebounding shortly after announcement
The next inflation figures are expected next week and for January; economists expect annual inflation rate to fall to