Weekly Market Update

Fed Expected to Pause Today but With Another Hike Still in the Forecast It’s Fed decision day so investors will mostly be marking time until the 2pm ET announcement. The consensus remains a pause but with another hike still penciled in for 2023. Powell, however, is likely to make it clear in the post-meeting press…

Investors Await Fed Rate Decision on Wednesday As oil moves to a new yearly high, and as investors await the FOMC rate decision on Wednesday, Treasuries continue to be under pressure. Yields are flirting with their October highs as trading opens for the week. Presently, the 10yr Treasury is yielding 4.35%, just under the 4.36%…

Treasury Yields Approaching Yield Highs Some better news out of China overnight, with retail sales coming in above expectations, is continuing the down trade in Treasuries and with import/export prices this morning on the hotter side it is also adding to the pressure as attention turns to the FOMC meeting next week. Presently, the 10yr…

August CPI –  A Bit Hotter Than Expected August CPI came a bit higher than expected but close enough that Treasuries are trading with a positive tone as the event risk has been successfully navigated. We discuss the CPI numbers in more detail below, but the increases were relatively isolated (gas and transportation costs) that…

August Inflation Data Fills This Week’s Calendar Treasuries are coming into the week a bit weaker as traders brace for new Treasury supply and continued heavy corporate issuance. 3yr, 10yr, and 30yr Treasury auctions will dot the schedule this week with the 3yr results providing a decent gauge of investor sentiment regarding future Fed policy,…

Market Awaits August ISM Services Survey Plummeting July factory orders in Germany, and sticky inflation fears egged on by higher oil, have stagflation fears weighing on European equities and our equity futures are trading lower in sympathy. That has lent a risk-off tone to the early trade and that is providing some footing for Treasuries…

September Jobs Report – Is it Really Goldilocks? Nonfarm payrolls came in just above expectations with 187 thousand new jobs vs. 170 thousand expected, but the prior two months were revised lower by 110 thousand jobs. That is six out of the last seven months with lower revisions, so keep that in mind when seeing…

More Soft Economic Data Keeps Bid in Treasuries A continued string of softer data today is providing room for the Treasury rally that started yesterday to continue this morning.  PCE inflation for July due tomorrow and August job numbers on Friday remain the two headline reports that the market will be focused on before getting…

Investors Turn from Jackson Hole to Jobs and Inflation No real surprises from Jackson Hole have markets in an upbeat mood to start the week and that has Treasury prices higher and equity futures as well. This week will provide some of the data points that the Fed loves, namely jobs and inflation, but for…

Is the Consumer Poised to Slow Their Spending? Some lower PMI readings in the UK and Europe have Treasuries trading in the green this morning as fears of a slowing global economy resonate. The angst over China’s troubles are well known and that apparently is reflected in Europe which is a big exporter of high-end…

As Investors Ready for Jackson Hole, Real Yields Move to Lofty Levels There’s a bit of a risk-on rally to start the week as European equities are in the green and our futures are pointing to a higher open as well. Nothing too fundamental is driving the risk-on moves so we’ll see if it has…

Will the Fed Finally Revisit the 2% Inflation Target at Jackson Hole? With no economic news today, no Fed Speak, and the Jackson Hole  Symposium looming next week, it seems Treasuries will be trading in a skittish mood into the weekend which means we still run the risk of setting new cycle yield highs on…