August CPI Headlines the Week

Treasuries are somewhat surprisingly finding an early bid this morning while awaiting the August inflation numbers tomorrow. That will be the key event of the week and provide the final piece of data for the Fed before hiking rates next week.   The debate around 50bps or 75bps continues, although the latter seems to be…

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Inflation Trends Look Positive

Treasuries are well bid this morning after reacting negatively to Fed Chair Powell’s Cato conference comments yesterday that didn’t retreat from any of the hawkishness of Jackson Hole. Treated negatively yesterday, this morning the Treasury rally is being explained as “investors feeling rate hikes are getting close to being fully priced in.” Go figure.  …

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Goldilocks Appears in August Jobs Report

Nonfarm payrolls increased 315 thousand while the unemployment rate rose two-tenths to 3.7%. Expectations were for 298 thousand new jobs, so the actual increase was just above expectations but trailed July’s 526 thousand new jobs. The largest gains came in healthcare, professional and business services, and retail trade. The moderation in job gains will be…

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ADP Employment Change Report Reappears

It had been a ritual for years during jobs week that the ADP Employment Change Report would be released on Wednesday and provide a bit of a heads up for the Friday BLS jobs numbers. Alas, ADP began to vary wildly from BLS numbers during the pandemic and recovery, so they took it down last…

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Markets Still Adjusting to Jackson Hole

Treasury yields continue to adjust from the tough talk at Jackson Hole last Friday, and that adjustment is mostly in the form of higher yields. The 2yr note overnight briefly hit 3.48% which eclipsed the 3.43% high set back in mid-June. That’s the highest 2yr yield since 2007 and reflects the market’s appreciation of the…

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Some Friendly Inflation News Appears Before Jackson Hole

Treasury yields are higher this morning but off the highs of the day as today’s inflation numbers came in better-than-expected (more on that below). The market is awaiting the keynote address by Fed Chair Powell at Jackson Hole, due at 10am ET. Once we get past that event, and unless Powell is exceedingly more hawkish…

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Treasury Yields Drift Higher Ahead of Jackson Hole

Treasury Yields Drift Higher Ahead of Jackson Hole:   Treasury yields are drifting higher this morning, but the moves are in range which is not surprising with Fed Chair Powell’s Jackson Hole appearance approaching this Friday.   The 10yr Treasury yield is back above 3.00% and is currently at 3.09% while the 2yr-10yr spread is…

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LEI Close to Signaling Coming Recession

LEI Close to Signaling Coming Recession: The somewhat bullish take on the July FOMC minutes from Wednesday was reversed yesterday when a couple Fed officials reiterated the need for continued aggressive rate hiking. That has put pressure on Treasuries this morning with the 10yr note flirting with 3.0%.   St. Louis Fed President James Bullard…

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Global Inflation Worries have Treasuries under Pressure

Global Inflation Worries have Treasuries under Pressure While a China-led global slowdown led to higher Treasury prices on Monday, today it’s higher UK inflation that has Treasury yields heading higher.   In a reminder that inflation is not only a domestic story but a global one, UK inflation accelerated to the highest level in 40…

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China Weakness Has Treasury Prices Higher

China Weakness Has Treasury Prices Higher A trio of reports out of China overnight suggest the second largest global economy has hit another soft patch and that has risk assets on the back foot this morning with Treasuries in the green.   Retail sales, industrial production and investment all slowed in July and the jobless…

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Cooler Inflation Numbers Continue to Roll In

Cooler Inflation Numbers Continue to Roll In First, it was the cooler-than-expected CPI report on Wednesday. That was followed by July PPI yesterday that printed negative for the first time since April 2020. That was joined this morning by a better-than-expected Import-Export Price Index.   Admittedly, this data series doesn’t carry the weight of the…

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Finally, a Cooler CPI Report

Finally, a Cooler CPI Report For the first time in what seems like forever, CPI came in cooler than expected and markets, both Treasuries and stocks, are rallying as a result.   The overall inflation rate was unchanged for the month versus the 1.3% increase in June and better than the 0.2% expected. It’s the…

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