Halister News

(Bloomberg) -- “We are growing in confidence that, with momentum overbought across oil, equities, and bond yields, we are nearing a downside correction in all three sectors,” and timing “is the only thing that is still in question,” independent strategist Marty Mitchell says in note.

• “Buying the bond market in anticipation of that correction is reasonable provided that we remember that it is a counter-trend proposition”
• Other observations from strategist morning notes:
• BMO (Aaron Kohli): “We note the tendency for the curve to price proportionally to the median dot-plot changes soon after the meetings, and we believe that such a repricing is quite likely this time”
  • “But the knock-on effect from a sharp move in risk assets is likely to be a more dominant impulse for the curve, and the press conference as well as language changes to the statement will also be an important aspect of the pricing move”
• CRT (David Ader): “CPI data will be most useful in gauging the tone of the FOMC’s statement –- which we continue to see skewed less dovishly than January, while still justifying the Committee’s decision not to move rates on Wednesday”
• FTN (Jim Vogel): “Inflation expectations embedded in the UST curve are 5bp above fair value, well within standard volatility tolerance, but lower oil should quickly translate into 3bp-5bp less pressure” on 3Y and 10Y