A wild month of economic inputs and global mayhem has essentially left the US rates market unchanged on the month. The SP responded in near identical fashion from the St Patrick's day turn. As readers know, we felt European regional financial stress would have demanded action by that date. EU inflation data at 2.6 has recharged rate hike fears and the Euro is near the high at 142. More craziness in the last session cannot be ruled out.
Fed activity gets a huge amount of criticism both from the outside and. lately, from within. Analyzing the capital market opinion shows that QE remains a significant pressure on negative real rates. The results are most evident when improving economic outcomes manifest themselves in equity prices. We are neither blessing or denying this process, merely observing the market's position. The regional Supply Management survey has been (and remains ) the key data set for us this year. In a rare double bill, the national survey posts 90 minutes after the Unenjoyment Report on April Fool's day. The Fed OMO schedule is conveniently blank.
We closed the last unit core short in the rates complex yesterday and are resisting the siren song of going long. An exploratory short in the SP yesterday morning was also closed as the calendar buttressed prices. We will take another look at 1329.00. The 5 year - our Treasury fave even though 10's and Bonds get the attention - struggles below 116.22. A settle above 116.30 TOMORROW would confirm a "weekly up" (lower low than prior week and close up on week) and pressure structural shorts. In Masters parlance, today is "moving day." You can't win it today, put yourself in position and don't take yourself out before tomorrow.