Weekly Market Update

The Fed Push Back Continues Treasury prices are lower this morning as Jay Powell used a 60 Minutes Interview last night as another opportunity to push back on thoughts of a March rate cut. While he didn’t add much to what was communicated after the FOMC meeting, the market is trading it more like fresh…

January Jobs Report Much Stronger Than Expected Nonfarm payroll gains came in much better than expected with 353 thousand new jobs vs. 185 thousand expected and 333 thousand in December (revised higher from an initial 216 thousand).  Private sector jobs increased  by 317 thousand vs. 165 thousand expected and 278 thousand in December (revised higher…

Fed Still Noncommittal When Cuts Will Begin As widely expected, the Fed kept the funds rate range unchanged at 5.25% – 5.50% and continued to push back against rate cuts beginning soon. The biggest shift in the statement was to change “In determining the extent of additional policy firming that may be appropriate” to “risks…

March Rate Cut Odds Rising Again Treasury prices are higher this morning as a series of bond-friendly reports have boosted odds for a March rate cut. From ADP’s downside miss on private sector job growth, to the Employment Cost Index pointing to slowing wage gains, to Treasury’s mostly as-expected auction announcement it has provided a…

A Busy Week Awaits Investors Treasury prices are higher on a flight-to-safety trade following the weekend drone attack on US troops in Jordan. That geo-political risk is likely to spread giving Treasuries additional support heading into a week full of first-tier events, headlined by the FOMC meeting concluding on Wednesday. Presently, the 10yr Treasury is…

Another Goldilocks Report The December personal income and spending numbers, along with the PCE inflation series, are out this morning and were pretty much in line with the Goldilocks-like GDP report from yesterday. Good growth on the back of healthy consumer spending, while inflation continues to trend lower. It’s doesn’t improve the odds of a…

Treasuries Find a Bid as Supply and GDP Loom The risk-on tone has returned this morning and once again has spread across to Treasuries. Investors are perhaps emboldened by a well-received 2yr auction yesterday that found strong demand. However, the Treasury will be back today selling $61 billion in 5yr notes so those results could…

Risk-On Tone Prevails As Investors Await Updated Inflation Numbers The risk-on tone that took flight on Friday is back again with equity futures pointing to more gains, and record highs, and Treasuries are also finding a bid as investors are in a buying mood as they await updated inflation numbers at the tail end of…

Fed Pushback on March Rate Cut Continues Treasuries are finding another tough go of it to close out the week as solid economic data meets Fed pushback on March rate cut expectations, and when you add in what is normally a seasonally tough time of year, it’s not surprising to see the current weakness.  Presently,…

December Retail Sales Beats Forecast, Putting Treasuries Under Pressure A hotter UK CPI report had Treasuries on the back foot as US trading began, and the strong retail sales numbers for December only added to the pressure, with short tenors backpedaling as the more aggressive rate-cutting expectations are dialed back a bit.  With the consumer…

Treasuries Rally on Cool PPI Report as March Rate Cut Odds Increase A cool PPI report has Treasuries rallying, especially on the short end, as March rate cut odds got a boost from the inflation numbers (more on that below). With the Fed’s preferred inflation series, PCE, not coming until Jan. 26, PPI provides a…

Treasuries Trade Well into Looming Supply and CPI Treasuries continue to trade well this week after a tough start to the year last week, and that positive tone comes even with new supply on tap and a CPI report looming tomorrow. Presently, the 10yr Treasury is yielding 3.99%, up 7/32nds in price and the 2yr…