This Week; there are a number of key data points that will be closely followed. The March employment data is the headliner with early estimates of 214K non-farm jobs created and the unemployment rates unchanged at 8.3%. The data comes on Good Friday with markets closed except the bond market will be open until noon, stay tuned though as the closing is still unsettled. IN the meantime we have ISM manufacturing and services sector data,, factory orders, ADP jobs estimate, weekly claims and Feb consumer credit. The 10 yr note and MBSs ended last week both working on their respective 20 day averages. Rate spiked two weeks ago and now have recovered somewhat; we continue to hold that interest rates will not fall much more from current levels, but won’t increase much either.
There are many that expect the Fed will do another easing move, equally about the same that don’t expect it. The Fed will not ease again unless the US economy reverses the current positive outlook. We caution though that even another easing by the Fed isn’t going to help the long end of the curve that much. Another easing move (printing more money) will likely increase inflation concerns.
TBWS
