Long before yesterday's ECB Announcement, traders and talking heads alike have been lamenting the lack of volatility in bond markets. If they'd only known that BOTH the ECB news and today's NFP would be so brutally close to consensus, those lamentations might have been accompanied with wails of incredulity, punching of computer monitors, and possibly some gnashing of teeth.
Putting an exclamation point on the lack of volatility, 10yr yields are currently grinding painfully sideways (think 'meatgrinder' as opposed to 'grinding to a halt') at the same damn levels that marked yesterday afternoon's sideways grind. It's interesting... the last time we got NFP, the reaction was an unprecedented rally in the face of stronger numbers.
This time is unprecedented as well. Today's NFP caps a two-day package of the two most significant potential market movers in at least a month, and we're basically unchanged on the day. Does that mean markets did a fairly perfect job of pricing in this week's events? To a large extent, yes. The problem is that no one knows where the next move comes from. Seriously, traders will be the first to admit that they're afraid to stray too far from safer, central technical ranges, or simply too far from the rest of the herd.
All that is neither here nor there for the purpose of discussing rate changes. The only relevant part is the suggestion today and yesterday's data doesn't do much to set any new trends in motion, and now it looks like we'll be waiting until at least next week before we have a chance to even consider such things.
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