View: US5yr4.4.2.png

US5yr4.4.2.png

Expectations for the payroll number in 30 mins are climbing with even a number of 375k being mentioned by one firm. Despite the large margin of error in this number, if it is significantly + or – consensus we will see a shift across asset classes as investors quickly recalibrate risk and make assumptions about potential trend changes. 

One key metric for the equity complex to monitor are US 5 year rates. A break through 2% from the recent consolidation zone would be a sharp warning that asset flows may reverse from equities and a move to 2.5% would be a “get out of Dodge moment.”

Comments

DinkDink
Why are 5 year yields important and not 10 year? 7 year? 4/4/14
Hunk of JunkHunk of Junk
Could have talked about any of them given it's about the shape of the curve rather than the 5's specifically although they have underperformed recently and should display more sensitivity. 
 
It's all ho hum anyway and the takeaway is there is no pressure on the Fed to do anything which means carry on tapering and stick to the "lower for longer" rates message. 
 
Worst thing is activity is dying, no reason for most money managers to do anything. 
 
It's down to earnings, China or a bloody big earthquake to torpedo equities here and frankly I'm not sure any of those would do it. 
 
Bulls: 99 - Bears: Gang raped in the ghetto 4/4/14
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