Rates Decline After Labor Market Shows Further Signs of Slowing

Rates fall for the fourth consecutive session. Swap rates declined 4-7bps today following this morning’s weak economic data releases. The move continued the trend from the past few sessions, and rates are now 25bps+ lower than their highs reached last Wednesday. Today’s main catalyst was a job openings report from the Labor Department, while durable goods orders (+0.6%) slightly underwhelmed compared to the +0.7% forecast. Meanwhile, oil prices continued to plunge after OPEC+ recently announced plans to pare its voluntary production cuts; both WTI ($73 per barrel) and Brent crude ($77 per barrel) are at 4-month lows.

Job openings hit multi-year low. The Job Openings and Labor Turnover Survey (JOLTS) showed job openings declined in April versus the prior month’s downwardly revised figures, at 8.059mm vs 8.355mm. The results were the lowest since February 2021 and below all economist estimates. The pullback spread across multiple sectors, including notable declines in health care and manufacturing jobs. JOLTS data precede tomorrow’s ADP employment data and Friday’s much awaited government labor data.

Bank of Japan (BOJ) may slow bond-buying. According to anonymous sources, the BOJ may discuss reducing bond purchases as soon as next week, when its policy meeting concludes. Currently, the bank is purchasing ~$38.6bn per month. BOJ officials did not indicate a specific reduction, and the shift downward is expected to be gradual. The Yen strengthened slightly throughout the trading session but remains near multidecade lows vs. the US Dollar.