Employment Revisions Were Strong... Front End Crushed... 3/10's Inverted 19 Bas
The employment number was strong... While the headline was a small miss, everything else told us that the economy continues to grind higher and companies are able to find workers... Our partner pointed out to us that every month we are seeing strong revisions upward.. Our guess is that the "Gig" number is showing up late... The unemployment rate is very close to the Fed "objective" of 3.5%... It looks like it will get well through that... And the market seems to agree with us... We are already seeing double digit gains in yields from 2 years to 7 years... And 3/10 is inverted by 19... 2/10 now inverted one... The expectation is that the Fed will go 50 in a month... Wirp is now at 1.82 for 50 and we still think 125 basis by July 27... Do not be surprised to see a 20 basis point back up in yields today in the front end... Nothing is going to stop the vigilantes and we see no reason not to push further... Will we get to the 2.67 HY this week on 5 years???? maybe
The employment number was strong... While the headline was a small miss, everything else told us that the economy continues to grind higher and companies are able to find workers... Our partner pointed out to us that every month we are seeing strong revisions upward.. Our guess is that the "Gig" number is showing up late... The unemployment rate is very close to the Fed "objective" of 3.5%... It looks like it will get well through that... And the market seems to agree with us... We are already seeing double digit gains in yields from 2 years to 7 years... And 3/10 is inverted by 19... 2/10 now inverted one... The expectation is that the Fed will go 50 in a month... Wirp is now at 1.82 for 50 and we still think 125 basis by July 27... Do not be surprised to see a 20 basis point back up in yields today in the front end... Nothing is going to stop the vigilantes and we see no reason not to push further... Will we get to the 2.67 HY this week on 5 years???? maybe
