News You Need

1) Some really bad information export laws are all but guaranteeing that weaponized bird flu is coming to an area near you soon. Keep this story in mind as flu virus tracks out of Asia later this season.

2) Earnings season will hopefully drive home the concept of life in a monetary regime - even a repo based one. $105.00 at 13-14x is easy to evaluate in static terms. Monetary regimes are about the journey not the destination, however. As discussed today on cnbc with Kelly Evans (she of the late great WSJ Ahead of the Tape)- capital markets become extremely elastic to the fundamentals when CBs get jiggy with policy. Participants and analysts need to de-link economic conclusions from market based inputs.

3) Notes at 2.05% and 5s at .90 are once again "rich" having "round tripped" the March yield adjustment. IG and HY relationships will be critical metrics to judge the middle of the year. Thus far, corps have had no trouble issuing and the concept of "crowding out" remains an undergrad test question at best.

4) The EZ continues to fall into the IMF austerity solution abyss. Portugal, Italy and Spain are percolating as cutbacks in Greece and Ireland rile "the street." James Carville's desire to be re-incarnated as the bond market ("cuz it gets whatever it wants") has gone global. China slow down fears will not abate but the trade data show the world still dances to the US fiddle playing. A quick shift back to surplus (if sustained) will renewrecycling interest in Treasury securities as the Fed pauses (if) after a period of abstinence.

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