Daily Market Update – March 31, 2016 (Close)
The past 2 days of mild rallies could only have been attributed to the unexpectedly dovish tone from Janet Yellen.
Once always the messenger of dovish outlooks, she had become less so as the expectation was increasingly for some very minor tightening with a barely noticeable increase in interest rates.
There’s been no doubt that traders haven’t liked the idea of even a 0.25% increase even if it meant that remaining so low was a reflection of a moribund economy.
The past couple of days were a reflection of still embracing an economy hobbling along, rather than rejoicing in one that is growing.
Obviously, anyone old enough would be concerned about unbridled growth and inflation, but it’s still so hard to understand the fears associated with even a series of increases, if they were indeed as small as everyone suspects they would be.
This morning’s futures were flat ahead of tomorrow’s Employment Situation report and stayed that way all through the session, as we may find out whether Yellen’s dovish tone is the one that will hold the day or whether some of the more hawkish Federal Reserve Governors are the ones who have it all pegged properly.
With only a single position set for expiration this week and time running out on the week, I didn’t expect to do much today, so I wasn’t disappointed. At least today still left me in a position tomorrow to either see an assignment or get to make a rollover.
It’s wasn’t too likely that in the day ahead of the Employment Situation report that too many would really stick their necks out, since even among those who should know the best, there’s lots of disagreement over the speed and intensity at which our economy is progressing.
It’s probably not a great idea to take sides when the really smart people can’t be in agreement, but it also may not be a good idea to take sides tomorrow in the event that emotions take hold.