Market Snapshot April 12, 2019

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Good Morning on this Happy Friday,

 

This morning the 10-year yield spike to 2.55% and mortgage bonds are off 18bps. This is not what we had hoped for but in truth, just takes us back to a very neutral place to pivot from. Better export data out of China (their import numbers of course sank like a rock), as well as their Total Loan Volume (which I had never heard of before today) and unsurprisingly in the US, import were up more than expected for the second month. Where do you think a substantial amount of the ballooning Chinese exports were sold, yes right here. Fortunately, it has not translated into higher inflation or the game would be over. On top of that, bank earnings for Chase and Wells were out today and both beat forecasts.  With today’s data,  stocks are doing better and bonds are paying the price (German 10-yr bund yield is now positive…). We will have to see what direction we go from here. I am still bond bullish and see a path for lower rates, however I have to share that with this week in the books, I am less sure I am right. We will see but any closing today or Monday above 2.55% on the 10-yr is likely a sign to lock.

 

Enjoy the weekend and first, make today great!