The Bank of England Blinks

The Bank of England Blinks   The UK continues to dominate the trading this week, and this morning the Bank of England said they would temporarily cease their quantitative tightening program and instead turn to temporary quantitative easing, or long bond buying, in order to “restore orderly market conditions.”   Volatility in both the currency…

Read More about The Bank of England Blinks

The Fed and Their Forecasts

The Fed and Their Forecasts   Now that the FOMC meeting has come and gone, and the Treasury and equity markets have resumed their selling as a consequence, let’s take a look at those forecasts and see what they might tell us.   A year ago, the Fed was declaring rates would be lower for…

Read More about The Fed and Their Forecasts

Fed Week Arrives

Fed Week Arrives With another hawkish FOMC announcement due on Wednesday afternoon, Treasuries are not waiting around as the selling has already begun this morning. The 2yr Treasury is yielding 3.94%, a new cycle high, while the 10yr Treasury is trying to push above 3.50%. It peaked at 3.52% earlier this morning but currently sits…

Read More about Fed Week Arrives

Treasury Yields Continue to Creep Higher

Treasury Yields Continue to Creep Higher Another round of global risk asset selling has our markets ready to open lower and Treasuries are going along for the ride. S&P 500 equity futures are indicated lower by 51 points to 3868. The index bottomed at 3685 in June, so still a distance away but a retest…

Read More about Treasury Yields Continue to Creep Higher

August CPI Headlines the Week

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,…

Read More about August CPI Headlines the Week

Inflation Trends Look Positive

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…

Read More about Inflation Trends Look Positive

Goldilocks Appears in August Jobs Report

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….

Read More about Goldilocks Appears in August Jobs Report

ADP Employment Change Report Reappears

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…

Read More about ADP Employment Change Report Reappears

Markets Still Adjusting to Jackson Hole

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…

Read More about Markets Still Adjusting to Jackson Hole

Some Friendly Inflation News Appears Before Jackson Hole

Some Friendly Inflation News Appears 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…

Read More about Some Friendly Inflation News Appears Before Jackson Hole

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…

Read More about Treasury Yields Drift Higher Ahead of Jackson Hole

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…

Read More about LEI Close to Signaling Coming Recession