François Rimeu (La Française AM) | The OPEC meeting resulted in maintaining the oil production cuts, as expected by the markets. Beyond this decision, investors were reassured by the possibility of these production cuts decreasing in the fall. Coupled with disappointing U.S. growth figures, this meeting had a significant impact on crude oil, which has dropped by 8% since the end of April. Again, this decline seems to be more of a support factor for growth and the markets in the coming weeks. Everything poin5s to a strong correlation between the price of a barrel of oil and 10-year U.S. bonds.
Therefore, the dynamics in place since the beginning of the year do not seem to need reconsideration: the inflation risk is perceived as low in the medium term, which allows the long end of the curve to remain fairly calm, with volatility trending downwards. This relative calm in the bond markets allows all risky assets to continue their rebound. However, we still believe that the inflation risk is undervalued, especially in the United States, which is why we maintain positions on inflation breakeven points to hedge portfolios that are still well-invested.
