Apache is functioning normally

Tough Afternoon For Lock vs Float Decisions

Even yesterday, we were already trying to reconcile the size of the bond rally relative to the underlying motivations.  Then the rally picked up steam this morning despite a lack of truly compelling justifications in the economic data.  While there are ways to explain the apparently outsized rally, it is certainly bigger than it needs to be ahead of the jobs report.  That begs the question: does the market see/know/feel something that suggests a big picture corner has been turned?  All we can really know is that the entirety of the past 3 weeks offer the most compelling potential top we’ve seen in rates since late 2022.  That could be because a top is taking shape or simply because this is the most convincing trap yet.  It’s not overly dramatic to say that the jobs report will cast a vote on the “realness” of this rally (if it falls far enough from forecast) and the result will be rates that are quite different than Thursday’s, for better or worse.