Weekly Market Update

New Treasury supply looms over the market, but the auctions this week are of the shorter variety (2yr, 5yr, 7yr), offering an easier sell than longer-dated maturities where expanding deficit/supply worries are a bigger part of the buy/no-buy decision. A 5yr auction awaits this afternoon (1pm ET), and coming on the heels of a well-received…

You may have thought it was safe to return to the somewhat calmer tariff waters vs. April, but you would be wrong.  With President Trump’s Friday morning declaration that Europe may be hit with 50% tariffs markets are in a decidedly risk-off mood. He also took aim at Apple; warning CEO Tim Cook that iPhones…

Treasuries find themselves on the backfoot today as concerns over budget deficits and fresh supply overwhelm the risk-off selling that’s occurring in equities this morning (Dow indicated down 380 points). A 5+% yield on 20yr Treasury bonds should entice buyers in today’s auction but that maturity is typically the weak link in the Treasury market…

The Friday afternoon downgrade of US Government debt by Moody’s (Aa1 from Aaa) has Treasury yields higher and a risk-off tone in equities to start the week. Moody’s (a lagging indicator per Treasury Secretary Bessent) becomes the last major rating agency to make the downgrade, and it comes as the House struggles to get past…

Treasuries open the final trading day of the week rallying after reaching some key yield levels yesterday. The buying is a sign that investors continue to find value, and perhaps more importantly that foreign buyers remain in the game, which was a fear coming after the “Liberation Day” tariff announcement. Also, the latest inflation report…

Weekend talks between the US and China produced a lowering of tariffs between the two countries for 90-days and that has sparked a robust risk-on rally to open the week (Dow futures up over 1000 points). Much like the US-UK “deal” was more a framework to quide negotiations, this new deal is also short on…

While plenty of details of the US-UK trade “deal” remain to be hammered out, and despite talking points that highlight a more limited agreement than comprehensive, the market sees an opening for more deals and that is the operative theme this morning. The attention will quickly turn to this weekend’s China meeting.   With Inflation Week…

Meeting Highlights  As expected, the Fed kept the funds rate range unchanged at 4.25% – 4.50%, and the statement acknowledged the twin tariff risks of possibly higher inflation and unemployment have risen. Other than that, there was little in the way of substantive changes to the statement from March. The decision was unanimous.   In…

News that the US and China are indeed in trade negotiations has put a risk-on mood into early trading, even with the FOMC rate decision on tap for this afternoon (2pm ET). With no expectation of a change in monetary policy, traders are taking full advantage of the trade talk news to push equities, but…

April nonfarm payrolls rose 177 thousand, easily beating the 133 thousand expected and 185 thousand in March (revised down from an initial 228 thousand).  The average monthly gain over the last 12 months is 152 thousand, so April was slightly better than the average. Speaking of revisions, February was revised down by 15 thousand jobs…

The initial estimate of first quarter GDP was negative (-0.3% YoY), owing to the huge front-running in import purchases, but the hotter-than-expected inflation numbers from the report also concern traders as it may limit the Fed’s response function to a slowing economy. As a result, we’re seeing an early risk-off trade that is keeping Treasury…

It’s a busy week of first-tier economic reports, headlined by Friday’s April release of nonfarm payrolls. The question is, with much of the data coming pre-tariff impact, will it matter much to investors as tariff “negotiations” continue in the background? Equity futures are quiet as is Treasury trading as the data flow doesn’t get started…