Overall: A Flock of Doves
Next week features a handful of central bank speakers, most of whom lean dovish, as well as March’s ISM numbers and jobs report. We think the consensus on NFP could be a little low. In terms of market direction, a strong jobs report could potentially do more for short ZQ/paid Fwd OIS/long USD positions than a weak report could do for the opposite positions. The size of the surprise we expect doesn’t lend itself to huge moves, however. We will watch next week’s heavy bill supply for signs of how households are thinking about cash management given recent news flow – MMF flows and bank deposit rotation moderated this week, but Treasury Direct participation in bill auctions remains very high suggesting increased appetite from households.
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