How do we interpret today’s NFP?
Do we get excited about the headline or remain skeptical over the negative revisions. Personally I see the avalanche of data from the past week as bond friendly in the aggregate. Mostly misses and the Fed was not hawkish. I concede the ISM services and labor cost numbers stand out a bit, but today’s big revision to March wages should take the edge off the former and weak GDP and slow retail sales do similarly for the latter. Not to mention, a Puerto Rico BK doesn’t exactly give me warm and fuzzies either. I don’t want to overstate the significance of that, but if nothing else, it’s the first time a US State or territory has taken those drastic financial steps.
So I guess the rate question is: Oh my, are we sinking? The bottom line is my float/lock assumptions remain intact. There’s still plenty of time left on the day, but my sense is we’ll end it slightly positive. I would further argue that we need to break 2.32 fairly early next week to back into that lower range mode.
I don’t always celebrate cinco de mayo, but when I do it’s with lower rates. Stay originating my friends.
#Sink-oDeMy-o #HomeOnTheRange #LowerForLonger #StayOriginatingMyFriend