Here come those “global growth concerns” again! It’s nothing too huge or scandalous, but today’s scorecard offered several anecdotes that fueled a downbeat global growth narrative. These ranged from things as obscure as Australian inflation data and a modest miss in German business sentiment to more logically bearish things like a massive downward revision for GDP from Canada’s central bank. Granted, several of these tidbits are off the typical beaten path of market movers for the US bond market, but taken together, they sent a unified message.
Global growth concerns are highly en vogue as a risk to rising stocks and higher bond yields. Today was a bit of a freak coincidence that required a certain balance of trading positions waiting to be exploited by otherwise small market movers. The coming days, however, won’t share that same concern. In other words, the data will be relevant enough that markets will respond accordingly if it suggests strength or weakness.
Today’s move was good nonetheless, with 10yr yields dropping more than 5bps at Fannie 3.5 MBS picking up nearly a quarter of a point. Tomorrow brings Durable Goods data at 8:30am as well as Jobless Claims. That makes it the 2nd most important morning of the week in terms of US econ data behind Friday’s Q1 GDP debut.