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Markets Largely Shrug Off Hotter-Than-Expected Inflation

Rates fall despite relatively elevated September CPI. The short end of the swap curve closed ~6bps lower today despite higher-than-expected CPI in September. Most of the move occurred in the immediate aftermath of the data release as 2-year and 3-year rates plummeted ~10bps from intraday highs. Jobless claims data largely contributed to the move as
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September CPI Expected to Show Slowing Inflation

Rates climb ahead of inflation day. Swap rates grinded higher throughout the session and closed 5-7 bps above opening levels. FOMC minutes contributed to the move as several Fed officials were concerned about the 50bp rate cut that was announced last month. The move comes ahead of tomorrow’s inflation report, set for release at 8:30 AM
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Fed Officials Prefer a Balanced Approach to Rate Cuts

Rates fall slightly while equities climb to new all-time highs. Swap rates reversed course today after rising 40+ basis points from 2024 lows (reached in mid-September). The short end of the curve fell 3-4bps while longer term rates dropped 1-2bps. Meanwhile, Nvidia powered a broader equity rally today, driving the S&P 500, DJIA, and NASDAQ
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Employment Data Exceeds Forecasts Ahead of Nonfarm Payrolls

Rates rise on strong hiring in September. Swap rates rose 4-6bps across a bear steepening curve today after ADP employment data showed private businesses added 18k more jobs than expected in September. Fed President Barkin also contributed to the move after he argued that “there is still work to do on inflation.” The move largely offset
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Middle East Tensions Overshadow US Economic Data

Middle East conflict spurs a risk-off session. Escalating tensions between Israel and Iran fueled a rally in safe-haven assets today. US Treasurys, gold, oil, and the USD all rose after Iran fired missiles at Israel, and Treasury yields fell 3-5bps across the curve. Lower than expected manufacturing activity and prices contributed to the decline in rates
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Powell Reiterates the Fed is Not in a Hurry

Rates rise on hawkish Powell comments. Swap rates rose 2-8bps today across a bear-flattening curve. The move was largely driven by Chair Powell’s press conference this afternoon, which spurred an immediate ~6bp rise at the short end of the curve. Elsewhere, oil prices have dropped over the past week despite escalating tensions between Israel and
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August PCE Helps Case for Cuts

Rates decline on PCE day. Today’s inflation data met or trailed expectations across all readings, providing the Fed with more evidence that inflation is under control. The data drove a 3-7bp rate decline across a steepening curve, largely offsetting yesterday’s move. Rates rose ~3 bps across the curve on the week. Meanwhile, equities were little changed
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GDP Signals US Economic Resilience Ahead of Inflation Day

US economic data spurs a rise in swap rates. Stronger than expected GDP and durable goods orders fueled an immediate 5-7bp climb in swap rates from intraday lows. The short end of the curve closed ~7bps higher while the long end was little changed. Meanwhile, equities opened higher on the strong prints, with the S&P
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Yield Curve Continues to Normalize

Rates rise while the curve continues to steepen. Swap rates traded within a ~5bp range at the short end of the curve and closed ~2bps higher today. Meanwhile, the long end of the curve saw more volatility, closing ~6bps above opening levels after grinding higher throughout the session. The move extended recent curve steepening that was
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US Consumer Sentiment Plummets, China Implements Aggressive Stimulus Package

Consumer sentiment leads to a decline in swap rates. Swap rates gradually rose to intraday highs before immediately dropping ~5bps on weaker than expected US consumer sentiment. Rates closed ~8bps lower from session highs and 1-5bps lower on the day. Equities also fell on the weak consumer sentiment data, though the S&P500 and NASDAQ rallied
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