Weekly Market Update

August Jobs Report – A Modest Rebound Signals a 25bps Rate Cut Modest improvement in the labor market from July’s disappointment, seems to argue for a 25bps rate cut later this month. August nonfarm payroll gains were 142 thousand vs. 165 thousand expected and 89 thousand in July (revised down from an initial 114 thousand)….

September Start Echoes August The Treasury market is benefiting from the risk-off start to September that is continuing again this morning. Global markets added to the risk-off tone after watching the action in the US yesterday. A plethora of employment-related reports are due every day this week so any signs of weakness will add to…

July PCE Inflation as Expected, Confirming Fed Pivot to Labor Market Mandate Treasury yields are a bit higher on the short end this morning as the Fed’s preferred inflation measure came as expected but that dented the odds of a 50bps rate cut vs. 25bps, at least until we see the August jobs report next…

More Data Points to a Slowing Labor Market The Treasury market is drifting around unchanged this morning and that should probably be the story for today as there are no economic releases of note until a 5yr Treasury auction this afternoon. That new supply may keep the market somewhat heavy, but investors are likely waiting…

Doves Take Flight at Jackson Hole The Treasury market is trading in the afterglow of Powell’s dovish pivot at Jackson Hole, and with another week of limited data it should be a rather range bound week. We talk more about the Jackson Hole revelations below but suffice it to say the rate-cutting cycle will begin…

Powell Likely to Signal Rate Cuts to Begin in September We’ve arrived at Friday with investors waiting on Powell’s Jackson Hole address at 10am ET. Not much else is on the docket today, so the stage is cleared for Powell and his comments (more on that below). Currently, the 10yr note is yielding 3.85%, down…

BLS 2023 Payroll Revisions and FOMC Minutes on Tap for Today We’ve arrived at mid-week with investors waiting on Powell’s Jackson Hole address on Friday, so the range trade remains in place. We do get, however, some important items today with the BLS payroll revisions for 2023 and the minutes from the July 31 FOMC…

Fed Communication Front and Center This Week After a week filled with inflation data, this week is light on new economic news but that leaves the stage for Fed speak and it should provide for tradable headlines. The big event in that regard will be Fed Chair Powell’s address at the Jackson Hole Economic Policy…

Data This Week Points to a 25bps September Rate Cut After a solid bout of data yesterday that dispelled any notion that the consumer was retrenching, yields jumped higher with the 2yr back over 4% and the 10yr approaching that level. In fact, this week has produced solid data that has pushed odds of a…

July CPI Keeps September Rate Cut in Play After a knee-jerk back up in yields following the CPI report, yields are dipping lower again as traders see the CPI report as not so bad after all. Frankly, CPI came as expected, but investors may have been hoping for more softness. Nevertheless, it should be good…

Inflation and Retail Sales Headline this Week’s New Information  Treasury yields are waffling around unchanged this morning as the lack of a weekend catalyst has allowed the dust to continue to settle from the volatility of early last week. This week provides plenty of new inputs for Fed policy as inflation data will be followed…

Markets Rethinking Recession Risk Treasury yields are edging lower this morning after they popped yesterday in the wake of better-than-expected initial jobless claims reducing some of the recession angst. Equity futures are lower into the open and that modest risk-off tone before a weekend, and after a big runup yesterday, is not surprising.  There’s no…