Morning 3-29

The 2/10 yield spread broke below this year’s lows and trading at tightest or flattest levels since 2007.The 5/30 spread is mirroring the activity of 2.10 as well but the 1/10 not yet below 2017 lows. These spreads especially the 2/10 and 1/10 are the recession barometers the closer they go towards zero the higher chance of recession. Maybe this time is different as US long yields are very attractive when you compare them to European and Japanese rates so possibly the need for yield buyers are suppressing long end rates. Why this time may not be different is that market does not believe in the hawkish Fed outlook for rate hikes the market is pricing a lower terminus rate then fed is predicting and a slowdown to come sooner rather than later and Inflation will not take hold above 2%. All ideas one can infer from the US yield curve.
Back to market activity. Bunds in a very tight 21 tick range, Spot euro 25 pips but Stock markets active once again. The tech sell off over the last few days still affecting the trade either positively or negatively. Today positive as Nasdaq +.6% after being lower 4.5% over prior 2 days Spoos +.3% down ~2% last 2 days. Dax +.8%, Spain and France +.6% FTSE +.4%.german Inflation data was ignored, Holiday market cannot be bothered with economic releases. Gold working on a third consecutive lower close after rallying for four straight days. Crude oil sideways to lower working on a 4th consecutive lower close and more damage to the short-term uptrend. Month and quarter end, last day to trade April Rbob, HO and may bent may cause some volatility at the 1:30 Settle.11:00 A.M crop report is one of the biggest of the year and is expected to cause plenty of volatility.
Economic Calendar:
• 7:30 PCE Core
• 8:42 Chicago PMI
• 9:00 Michigan revision
• 12:00 Feds Harker to speak On economy
Notes:
Trump continues to bash Amazon stock down a few bucks pre market

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