US STOCKS: Late Equities Roundup: Materials, Industrials, Energy Underperforming

• US rates sold off on net following the BLS preliminary estimate of the payrolls benchmark revision coming in more negative than the midpoint of some very wide ranges but at least tracking within those broad ranges.
• Ahead of Wednesday’s PPI and Thursday’s PPI release, it’s helped see implied rates lift a little off lows seen since Friday’s soft payrolls report but there is nevertheless a clearly dovish pricing backdrop.
• Fed Funds implied rates point to 27bp of cuts with next week’s FOMC decision (i.e. a little below 10% odds of a 50bp cut) although expectations of three consecutive rate cuts in what’s left of this year have been pared slightly with 68.5bp of cumulative cuts currently priced vs recent lows of 72.5bps.
• Further beyond, there are a cumulative 95bp of cuts to the March FOMC whilst SOFR futures point to in total ~145bp of cuts from current levels with a terminal yield at some of its lowest levels since Sep 2024, when it saw cycle lows. 

• RES 4: 151.62 61.8% retracement of the Jan 10 - Apr 22 bear leg
• RES 3: 150.92 High Aug 1 and a key resistance 
• RES 2: 149.81 76.4% retracement of the Aug 1 - 14 bear leg 
• RES 1: 147.63/149.14 20-day EMA / High Sep 3  
• PRICE: 147.25 @ 16:34 BST Sep 9
• SUP 1: 146.21 Low Aug 14  
• SUP 2: 145.86 Low Jul 24
• SUP 3: 145.47 Trendline drawn from the Apr 22 low
• SUP 4: 145.40 50% retracement of the Apr - Aug upleg

USDJPY is trading lower as the pair extends the reversal from last week’s 149.14 high on Sep 3. The move down refocuses attention on key short-term support at 146.21, the Aug 14 low and a bear trigger. A break of this level would highlight a stronger bearish threat and expose 145.40, a Fibonacci retracement. Clearance of the Sep 3 high is required to reinstate a bullish theme.  

• -5,000 TYZ5 113-12, post time bid at 1418:53ET, DV01 $344,000.
• The 10Y contract trades 113-11.5 last (-6)