US TSYS/SUPPLY: MNI UST Issuance Deep Dive: August 2026 - Refunding Preview

• Treasuries are finishing moderately weaker Wednesday - near the middle of the session range, generally cautious trade on decent volume ahead of Thursday's flurry of data: June employment joins weekly claims ahead of Friday's close for the 4th of July weekend.
• TYU6 currently -11 at 109-17.5 vs. 109-12.5 low, First key support to watch is 109.06, the Jun 22 low. A breach of this level would highlight a possible reversal.
• Nonfarm payroll gains are expected to slow in June after a very strong stretch (in relative terms). Broad Bloomberg consensus sees NFP rising 110k (172k prior) and private 115k (120k prior), whilst primary dealer analysts share that view for total payrolls but are more conservative for private at 98k.
• ADP private sector employment disappointed expectations in June as it increased 98k after two months a little above 100k, although it was still the strongest increase since Jan 2025 prior to Apr-May.
• The headline ISM Manufacturing PMI fell to a 2-month low 53.3 (54.0 prior) in June, weaker than the 53.9 expected. Even so, this was a 6th month solidly above the 50 level indicating expansion, suggesting continued robustness in US manufacturing.
• Fed Chair Warsh unsurprisingly has nothing to say about upcoming policy decisions, "we're going to deliver price stability in the US, that's what this committee has signed up to do, and our objective is to do that."
• Swiss CPI and Eurozone unemployment data precede the key US payrolls release for June tomorrow morning.

• Average hourly earnings growth is expected to see a second month at a seasonally adjusted 0.3% M/M in June although with analysts skewed towards a dovish surprise.
• The 3.5% Y/Y seen for the broad Bloomberg consensus would mark some continued stabilization in wage growth having recently bottomed back in March at its lowest since Mar 2021. Specifically, it follows 3.45% Y/Y in May or a three-month average of 3.48% having cooling from last year’s peak of 4.2% in Mar 2025 and more recently 3.9% in November.
• The non-supervisory category has been running slightly hotter but has also broader kept to this trend of sizeable moderation before recent stabilization, most recently at 3.56% Y/Y in May.
• Current levels of wage growth should continue to see little direct inflationary pressures whilst very strong productivity growth continues. That said, with the Fed increasingly eyeing stubborn core services prices there will be more scrutiny than usual on AHE growth this month.
• The average work week meanwhile is expected to hold steady at 34.3 hours for a third consecutive month, at typical but still relatively low levels on a historical basis.  

The following is taken from the MNI US Payrolls Preview, which can be found in full here (link).

• The past few months have comfortably passed the hiring test of a labor market that had been characterized as “low hire, low fire”, especially in April but also in May. May saw an outright 741k nonfarm payrolls added compared to 664k in May 2025 and 747k in May 2024.
• June tends to be a much less important month for hiring as activity winds down over the summer, including an education-related drop in July (payrolls increased by only 267k in June 2025).
• That could still see any World Cup related job creation this month have a larger seasonally adjusted impact than would have been the case with the same amount in May. That could however be at least partly limited by the fact that June has seen one of the more pronounced shifts in its seasonal profile with historically stronger increases (396k in June 2024, 663k in 2023 and 911k in 2022). 

• Seasonal factors should also be watched after providing a notable tailwind to seasonally adjusted jobs growth in May with its most favorable factor for a May since 2022 as it bucked a trend of increasingly less favorable ones.  
• Indeed, using the May 2025 seasonal factor crudely suggests we would have seen seasonally adjusted jobs growth of 103k vs the 172k reported in what would have been much closer to the 88k expected.
• As for June, seasonal factors have shifted to being their most favorable in decades.