Weekly Market Update

Dovish Fed Comments Spark Treasury Rally Investors liked what they heard yesterday from the Fed, particularly Fed Governor Christopher Waller (more on that below). Those good feelings that rate cuts could be coming earlier in 2024 than previously thought continue to reverberate this morning, along with an upwardly revised 3rd quarter GDP estimate that saw…

Risk-Off Tone Greets Investors Treasuries are finding an early bid as weak economic results from China overnight point not only to the ongoing troubles in the second largest economy but also to a general slowing in the global economy.  Meanwhile, 2yr and 5yr Treasury auctions today will likely keep any rallies on a short leash….

Treasury Yields Press Against Resistance Despite a 10yr TIPs auction that didn’t go great yesterday Treasuries this morning are extending gains and hitting two-month low yields. Also helping the pre-Thanksgiving trade were Fed minutes that really didn’t offer up any surprises (more on that below), and the market took that as a bit of relief….

Sparse Data Awaits Investors During This Holiday-Shortened Week Treasuries are trading a bit heavy this morning as the upcoming Thanksgiving holiday has investors distracted and disinterested so many are sitting on their hands for now. Additional supply this week (20yr and 10yr TIPs) is also contributing to some reluctance on the part of traders as…

Is the Labor Market Finally Starting to Weaken? Treasuries open the day with a slight downside bias and that may be the case for a while as the Thanksgiving holiday beckons next week, and first-tier data will be few and far between for the next two weeks (more on that below). Presently, the 10yr Treasury…

October PPI Confirms CPI With a Softer Read on Wholesale Inflation Treasuries are giving back some of the outsized gains from yesterday, despite more good news on inflation. Prices were drifting lower into the PPI and retail sales releases and that picked up as retail sales, while easing in October, were revised higher in September…

Investors Look to October CPI and Retail Sales This Week Early Treasury gains flipped to losses as investor angst over last week’s poorly received auctions and upcoming inflation reads weigh on trader sentiment. October CPI numbers are due tomorrow and while not likely to shift the consensus from pause to hike may reveal enough “stickiness”…

Treasuries Recoup Some of Yesterday’s Losses Much of the increase in yields following yesterday’s disappointing 30yr auction is being reversed this morning as traders reassess and perhaps breathe a sigh of relief that at least the new supply has been put away, albeit with some difficulty. 30yr auctions have typically struggled and the earlier 3yr…

Investors Await More Treasury Supply and Fed Speak Treasury prices are higher in early trading as investors await more Fed Speak and the 10yr Treasury auction results this afternoon. While the moves are tentative so far, it’s interesting that much of the sharp rally from last week continues to hold, even with additional supply coming…

Treasuries Trading Heavy into a Trio of Auctions This Week Treasury prices are opening the week lower and given the robust rally in prices last week it’s not surprising that some give back is in play. Also working against higher prices are a trio of coupon auctions this week which should keep any rally attempt…

October Jobs Report – Weaker Than Expected Nonfarm payroll gains came in weaker than expected with 150 thousand new jobs vs. 180 thousand expected, plus the prior two months were revised lower by 101 thousand jobs. Revisions had been trending to the downside this year until September, but that appears to be the anomaly as…

Fed Delivers a Dovish Pause – References Tighter Financial Conditions As widely expected, the Fed kept the funds rate unchanged a 5.25% – 5.50%. Also, the statement was largely unchanged from September except for characterizing economic activity as “strong” vs. “solid”. The statement also added a mention to tightened financial conditions, recognizing the increase in…