US ISM
ISM new orders doing a good job of reminding everyone what a 330bp move in bond yields will do to the growth outlook.
Inflation is a slow-moving beast, but it will/does/is respond-(ing) to rates, and pulling activity out from under it will achieve the desired declines.
Policy can afford to pause, in our view, although we’ll have to grind through a few more hikes yet.
But the pause and subsequent pivot will come.
You can see these brief windows into what it might look like. That was a near 20bp decline in 10s, post the ISM drop, and risky assets along the spectrum all rallied.
They key for us is to stick to the DAA views, and tactically trade around it whenever the market gets too excited in either direction.
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