- As stated last week, an unemployment print of 4% would lead me to look for a response out of the Fed. This data was met with strong payroll data, but the headline unemployment rate takes precedence. This furthers my call for dovish rhetoric at the FOMC conference.
- At the time of last week’s writing, headline CPI was projected to be .3% per Bloomberg, which I articulated was contrary to the data which revealed a .1% print. Bloomberg has since updated its projections for headline CPI to .1%. I believe the market has yet to catch on to this.
- Given the rise in headline unemployment and assuming CPI comes in at .1%, the Fed is likely to take a dovish stance, therefore nullifying this past Friday’s spike in yields and DXY.
- A weak PPI further bolsters this call.
