Two forces are driving markets right now: the Fed's rate path after a shockingly weak jobs report, and a fiscal credibility crisis in France rattling European bonds.
On the Fed, the published research consensus is that dovish signals from Vice Chair Jefferson and NY Fed President Williams, combined with September payrolls of just 29,000 versus roughly 90,000 expected, have collapsed October hike odds from about 70% to 20–30%. Most analysts still pencil in one final hike in December. Yet researchers note US 10-year yields remain stuck above 5.2%, held up by heavy Treasury supply, Middle East risk premia, and AI-related debt issuance.
In Europe, a wide range of recently published analysis flags French OAT-Bund spreads blowing out to 128–150 basis points — wider than Italy or Greece — as markets doubt France can deliver €43–54bn in fiscal tightening before the 2027 election. ECB hike expectations have been trimmed accordingly.
A contrarian thread argues markets are overpricing tightening globally, while one fair-value model pegs the US 10-year at 6.07%. Watch US CPI next as the key catalyst.