Welcome back from the weekend-
Last week was a great week to be long U.S. Treasuries (at both the long and short end of the curve). Remember when the 10-Yr yield hit 3.25% and the whole CNBC world panicked and sold short U.S. Treasures – we didn’t thankfully. 10-Yr yields fell 11 bps last week to 3.06%. We do however have a catalyst that could very easily push yields higher/bonds lower in the back end of the week, and that’s wage growth expectations. While wage growth remains a late cycle indicator and a deterrent of lower bond yields (for the time being), we should continue to see headline inflation slow m/m and y/y via the CPI data. So we’re trying to balance those two indicators for the time being, and ultimately the cycle will dictate the direction intermediate/longer-term direction – you all know where we stand here.
China was down another -2.2% and down -29% from the January peak
German Chancellor Angela Merkel announced that she will not be seeking any further political offices past 2021.
Oil -1.15% and not quite to the low end of our range.
Gold -0.28% – we’ll be looking at entering closer to 1220.00
Price remains bearish trend
Volume increases on down days remains a bearish indicator
Volatility remains north of 20.00 (cash VIX) which is also a bearish indicator
The feds favorite inflation gauge (Core PCE Index) – held flat y/y at 2.0%
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