Market Journal: Watch 2s

Discussion

2s continue to behave more hawkishly than the disinflationary narrative proliferating around the market. My gut says Powell repeats the dovish Feb 1 presser “disinflation process is underway” message, but 2s’ relatively hawkish behavior combined with Waller’s message last week suggests Powell may not provide the full throated soft landing endorsement the market is looking for. Monitoring closely…

Away from 2s, defensive sectors are exhibiting strength with green VOL. Topping process continues. Just a matter of how much divergent squeeze is left ahead of Powell.