If you’re a follower of my posts you understand that I’m clearly on the winning side of this call, but even I’m surprised we’re approaching 2 on the 10s ahead of GDP.
Sure there is always that buy the rumor sell the fact thing, but my guess was they’d want to actually see the bad number first this time given the headwinds lower rates faced. That said, some things have changed and I sense a palpable shift in the consensus view on rates right now. Enter geo-political noise, a bad NFP out of nowhere (or was it), ISM misses for what seems like the first time in about 7 months, the sense that Trump isn’t the cure all for fiscal stimulus and what you get is perhaps a mini-capitulation that 3.0 isn’t coming any sooner than it didn’t come in 2014.
As I’ve addressed in previous posts, this post March rally is pretty typical. I called for a 2 point rally in Fannie Mae’s 3s with a top side of 3 points. Well we are 1 tick shy of 3 points right here. Which brings us to a pretty big pivot, and I’m not convinced we are going to break through here. On 4/7 I wrote “If I had to put a number on it I’d say 65-35 we test 2% sometime soon”. I’d likely up that to 75% today.
#lowerforlonger #notsofast #measuredpace #slowisthenewfast #thisiswhatitsoundslikewhendovescry #75% #throwbacktuesday
PS For throwback Tuesday I’m including a few links to some oldie but goodies to get any newbies caught up. I’d also recommend going back through the last 3 or 4 blog posts as well.