U.S. government bond prices are oscillating between gains and losses but are holding firm after forming a quasi-double bottom in the early session. This comes amidst an initial jobless claims report that fell to the lowest level in fifty years, as well as overnight reports of German manufacturing goods falling 4.2% in February, only further exacerbating European growth concerns. The focus will remain on Friday’s jobs report, as well as average hourly earnings, especially after only 20k jobs were added in February. If late cycle wage inflation continues to accelerate and global and domestic growth decelerate then you will a see a rotation into domestic stagflationary conditions, which will impact peak corporate profitability moving forward. The benchmark 10-yr note remains bearish trend with the current range seen between 2.33 – 2.54%. Initial support for the June bonds comes in at 147-10 with the next upside target around 148-01.

30-Yr T Note Jun ’19 Daily Chart

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