Monday was the slowest day of the year in terms of volume. Volatility was also very muted by the time US markets fired up for the day. But here comes Friday! Not to be outdone by that pesky old Monday, today took the quiescence to a level so high that I felt compelled to tell you about it again. Realistically, this is something market analysts do because the quiet conditions don’t leave anything else to talk about.
With all that in mind, I won’t waste your time with 3 or 4 more paragraphs of filler. For those hoping to see 10yr yields hold a ceiling around 3% in 2018, 2.895% is a great place to be. For those who understand the headwinds facing rates, it’s also a logical place to be. Whether rates pay more attention to the headwinds or the hope remains to be seen.
In some ways, it seems like we’re getting closer to an actual debate about a bounce. In other ways, it feels like we’ve been suckered into false hope. One true thing is that it’s only a matter of time before hope would be justified. A legitimate trade war would accelerate the time frame. A deescalation of trade tensions would kick the can.