I don’t love the price action I’m seeing in bonds after CPI. I hate to read too much into a few basis points but US 2s are now at the highs of the day, up to 4.49% from as low as 4.43% after the CPI revisions.
The data was lower but it’s not a game changer. Fed funds futures pricing is down to 110 bps this year from 114 bps in cuts prior to the numbers. Next week we get the January CPI report.
A long list of things are making me wary of a reversal today:
- SPX hitting 5000 in one of the fastest rallies ever
- NVDA hitting $700 with an earnings report looming
- Oil prices creeping higher (with yields)
- Bitcoin has reversed some of today’s gains in the past 15 mins
- Poor February seasonals
bitcoin dip a sing of a shift in broader sentiment?
I don’t have much conviction in a call for a reversal but I certainly wouldn’t chase risk trades higher today.