Volatility Week: Rates Whipsaw on Hot Manufacturing Data, Cooling Jobs Data

The 10-year Treasury has seen a volatile week: 4.19% on Monday to 4.43% Wednesday, now at 4.31% as markets await tomorrow’s big jobs report. Everything is magnified as the “data dependent” Fed is now 2 months away from the anticipated pivot date. Fed Speak of the week: we need “time for the clouds to clear” before cutting rates (Richmond Fed Pres Barkin).

Futures markets are at 71% for a June cut (up from 62% yesterday). Monday and Tuesday both saw hot manufacturing data as the sector went into expansion mode for the first time in over a year. Then rates cooled today on higher than expected jobless claims (which could have been affected by the early Easter holiday). On deck, the big 3: jobs report tomorrow, CPI Tuesday, PPI Wednesday. Stay tuned…

By David R. Pascale, Jr., Senior Vice President at George Smith Partners.