FED: US TSY 2Y FRN AUCTION: HIGH MARGIN 0.038%; ALLOTMENT 11.37%

The Dallas Fed's Texas Manufacturing Outlook Survey for September was strong in both the headline reading and the details, building on August's strength. While the general business activity index dipped to 9.8 from 11.6 prior, it beat the 7.8 expected, and August's had been an 18-month high. But as the report put it, "price and wage pressures increased broadly".

• And the key subindices were very impressive: new orders jumped to 30.7, the best since April 2021, from 22.0 prior; and production rose to the highest since July 2021, at 29.5 from 16.1 prior (a figure which is "suggestive of a robust pace of output expansion", per the report). Employment jumped 7 points to 15.1 and shipments 11 points to 24.8.
• Forward-looking expectations pulled back but that's understandable given the strong current activity readings.
• The ISM Manufacturing PMI-equivalent reading (as calculated by MNI) rose to 58.3 from 56.2 prior, the strongest since December 2021. It was also the strongest among the 5 regional Feds on this basis in September.
• Like the other regional Fed surveys, price pressures picked up substantially in September. Current prices paid rose to a 51-month high 52.2 from 44.1 - indeed after edging up to the low 30s throughout the period of high energy prices since February, it suddenly exploded this month.
• Prices received edged up to 27.6 from 22.7 prior; that's just a 3-month high which suggests manufacturers aren't quite passing through higher input prices to buyers yet, but we take note that 6-month ahead prices received rose to 41.8 from 40.9, the 2nd highest since April 2022, so perhaps there are higher selling price prospects awaiting should input prices fail to subside.
• Inflation remained the biggest concern around firms' outlooks as well (60% of respondents), followed distantly by geopolitical uncertainty and demand.

• US TSY 26W AUCTION: NON-COMP BIDS $1.746 BLN FROM $82.000 BLN TOTAL

• US TSY 13W AUCTION: NON-COMP BIDS $1.826 BLN FROM $95.000 BLN TOTAL