With only a light smattering of data and the Fed in the communications blackout period ahead of the April 28 FOMC meeting, the economic calendar will provide market participants with a bit of a hiatus this week.
Indeed, despite last week's slate of robust data, Treasury markets were most unimpressed with 10-year yields falling a few basis points on the week and Fed rate hiking expectations being dialed back a bit. This despite seeing the second most robust retail sales print in the series' history combined with the third-highest score CPI print in about 15 years.
Strong US CPI and retail sales data were not enough to boost the USD, and the DXY is back below the 92 levels. With the USD momentum running out of steam lately, the attention turns again to reflation trades and idiosyncratic factors.
After a week, that can best be summed up by the old saying "it matters when it matters" is about as concise and succinct a way of explaining the difference between fundamentals and the current narrative. As such, I suspect we should expect a little spring cleaning this week as the market awaits the subsequent significant interest rate swing shifting narrative.
In summary, this week's relatively scant data docket and absence of Fedspeak suggest that bond markets will have to wait a while longer for the next catalyst from US macro. Beyond this week, there are plenty of candidates over the horizon, including the April 28 FOMC meeting and the April jobs report the following week.
Crude oil prices initially pushed higher after Wednesday's big move, but sagged after traders better digested China's GDP's print's base effect after the eye-catching headline.
But planking prices positive on news of US retail sales (up the most in 10 months) and lower-than-expected new jobless claims. Both data points reinforce the market belief that demand is coming back strongly over the remainder of 2021.
Delta Air Lines' (NYSE:DAL) CEO said on TV that the company had seen a huge surge in bookings. And when planes fly, the oil market will fly.