Oliver Mangan: Inflation drop sparks rate cut fever across markets

The catalyst for the rate cut fever has been far bigger falls in inflation in recent months than had been expected by central banks and markets

ECB president Christine Lagarde: No changes to interest rates are expected this week at any of the central bank meetings. Picture: Arne Dedert/dpa via AP

Markets have been on fire since late October, with equities marching higher and bond yields tumbling, as investors bet on rapid interest rate cuts in 2024. 

The moves on stock markets have been large, with both the S&P 500 and Euro Stoxx 50 indices up by circa 11%. Meanwhile, bond markets have also made good gains, with 10-year yields in the UK, eurozone and US falling by 75-85bps.