Proof of Data Dependent Concept

Proof of Data Dependent Concept

The first two days of the new year were shaping up to paint an unpleasant picture for the bond market in which the strong rally in Nov/Dec faced the prospect of technical correction.  That risk remained through the first few hours this morning, but things began to change after the JOLTS data (not at first, but eventually!). As losses turned to gains in the afternoon we had fresh proof of concept for the prevailing “data dependent” narrative for rates.  JOLTS wasn’t even bad, per se, it was merely the first time we’ve seen consecutive months under 9m since job openings were still on the way up in 2021.  At the risk of reiterating the obvious, Friday’s jobs report will tell us even more about data dependency.  On a side note, Fed Minutes helped–primarily due to the nod to an eventual winding down of quantitative tightening (something that came through better in today’s minutes than in the press conference 3 weeks ago).