Are they going to take their ball and go home?

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So the Fed is really prepping us for go time in March and maybe even signaled 2 hikes this year.  

The data didn’t help our cause this week, but I’m not sure it hurt us either.  Headline beats in ISM’s were’t what the doctor ordered, but there was some weakness in key components and some other data points.  All eye’s are on the jobs numbers next week.   At these levels it’s either a bounce or a new range.    

If you are rooting for a bounce, you are feeling good about us rallying into the close right now.  We are well off the lows of the day (which were nearly the lows of the year) and even positive on a few coupons.  I’d also suggest that early month isn’t always so kind and we sometimes rally into ADP after a sell off.  So a strong argument can be made for some strength into the numbers and therefore I would still assume the range is intact until it isn’t.  

My caution meter is pretty high though as anything can happen next week.  If I tie in my chart assumptions from a few posts ago, we usually don’t see any relief for another couple weeks if this March is going to follow the historic quarter 1 rate pattern.  I’d move my lock bias at current levels a bit higher than it’s been inboxed the past and reiterate full on lock mode sub 2.40 if we are lucky enough to get there before Wednesday or Friday.  Here’s a current YTD chart for good measure.  

-Philip Mancuso

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