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Fed Rate Cuts Are Set for Launch

Rates fall to close out inflation week. Swap rates reversed course today after rising the past two sessions on slightly elevated inflation figures. Rates fell 1-6bps across a bull steepening curve, cementing a 4-10bp decline over the past five days. Meanwhile, the S&P 500 rose for the fifth consecutive session, up 0.54%. All eyes are
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US Producer Prices Rise, ECB Cuts Policy Rates Again

Rates inch higher as producer inflation remains elevated in August. Swap rates traded within a ~10bp range today as PPI data spurred a volatile session. Despite the volatility, rates closed nearly unchanged as most of the rate/yield curve rose 2bps. Combined with yesterday’s slightly elevated CPI, this week’s inflation data increased the futures implied probability
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Core Inflation Was Higher Than Expected in August

Rates rise on inflation day. This morning’s inflation print provided a volatile session as rates soared from intraday lows to their highest levels immediately after the data release. Rates then plummeted back near pre-CPI lows, only to rise throughout the remainder of the session to close 1-5bps higher. Today’s inflation figures were digested as further
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Markets Await CPI Data Tomorrow

Rates fall ahead of tomorrow’s inflation data. Swap rates fell across a steepening curve today as the short end declined ~8bps while the long end fell only ~4bps. Markets continue to look ahead to the next few days of inflation data, with CPI to be released tomorrow and PPI on Thursday. Elsewhere, tech stocks generally rallied
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Markets Await Key US Inflation Figures

Swap rates rise overnight but close nearly flat. Rates hit their session highs before 8AM this morning, up 4-6bps across the curve and reversing much of Friday’s risk-off move. However, rates grinded lower throughout the remainder of the session, with the short end of the curve closing ~2bps higher while the long end fell 1-2bps.
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Labor Data Fuels Debate Over Pace of Fed Cuts

Markets shed risk on weak labor results. UST yields fluctuated throughout the morning and afternoon after data showed labor market contraction in August and following Fed Governor Waller’s comments which were interpreted as supportive of a larger, 50bp cut in September. The policy sensitive 2-year yield ended the day ~10bps lower at ~3.65%, while the 10-year
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Private Sector Hiring Sends Another Sign of Labor Weakness

Rates fall slightly ahead of crucial labor data. The short end of the rate/yield curve opened 5bps lower today after ADP employment showed further signs of slowed hiring. However, rates reversed course and hit session highs after ISM Services figures were higher than expected, coming in at 54.6 versus 54.0 expected. Ultimately, rates gradually declined throughout
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Initial Data Show More Labor Market Cracks

Rates plummet as labor market shows further signs of deterioration. Swap rates declined dramatically after JOLTS job openings were well below the 8.1mm estimate. The data is another signal that the labor market is weakening, a troubling sign ahead of Friday’s nonfarm payrolls and unemployment rate releases. Rates fell 7-11bps across a bull steepening curve,
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Equities Suffer Worst Setback Since August 5th Panic

September commences with a risk-off session. Weak US manufacturing data and Nvidia’s continued decline powered a rally for Treasurys and a broader equity sell-off. Swap rates and Treasury yields dropped 5-8bps on increased demand for safe haven assets. Meanwhile, the VIX “fear gauge” index spiked over 33% to ~21.0 while the NASDAQ led major stock
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Inflation Continues to Moderate in July

Rates rise on PCE day. Personal consumption expenditures (PCE) data was largely in-line with forecasts as the lone deviation was a slightly lower than expected core print. Rates rose 2-6bps despite the minor downside surprise, closing the month 25-50bps lower across a steepening curve. Rates were volatile throughout August, largely fueled by a fluttering labor market
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