On the heels of a very favorable jobs report, stocks (ES futures, above) are once again knocking on the door of bull highs. Perhaps the most interesting moves in the wake of the jobs data, however, were in U.S. interest rates, where 10-year Treasury yields have risen to 3.47%. That has given some strength to the U.S. dollar. If we begin to see speculation--and more importantly, data--to suggest that the worst of unemployment is behind us, that could move up the timetable for the Fed to unwind its low interest rate regime. That would support not only Treasury rates, but the U.S. dollar. Interestingly, we could see a shift in which--at least for the time being--rates, the dollar, and stocks could move in the same direction, as economic strength leads to greater concerns regarding inflation than deflation. One day's worth of data is just that, but I'll be watching those intermarket correlations closely.
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