OUTLOOK: What to Watch: Headline Sep Jobs Report
Oct-07 11:30
Tsys trading softer/off recent overnight lows (30YY tapping 3.8034% high), moderate volumes (TYZ2<265k) as markets await employment report for September (+255k est vs. +315k prior).
- Still inconclusive whether President Biden will make any post-data comments to the press as has occurred in past strong jobs reports. However, the White House did announce an open press gathering on the south lawn (1055ET) prior to Biden's departure for Joint Base Andrews at 1105ET en route to Hagerstown, Maryland.
- Data line-up at 0830ET:
- Change in Nonfarm Payrolls (+315k, +260k)
- Change in Private Payrolls (+308k, +275k)
- Unemployment Rate (3.7%, 3.7%)
- Average Hourly Earnings MoM (0.3%, 0.3%); YoY (5.2%, 5.0%)
- Labor Force Participation Rate (62.4%, 62.4%), followed by:
- Wholesale Inventories MoM (1.3%, 1.3%), Trade Sales MoM (-1.4%, 0.5%) and Consumer Credit ($23.811B, $25.00B) at 1000ET
- Fed speakers ahead:
- NY Fed Williams moderated Q&A, no text at 1000ET
- MN Fed Kashkari on agriculture, food and inflation, no text at 1100ET
- Cleveland Fed Bostic on wealth gap, no text, Q&A at 1200ET
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GILTS: 2Y Yields Drop Sharply Alongside 2023 BoE Hike Pricing
Sep-07 11:25
The 2Y UK bond yield has fallen as much as 25.2bp today following commentary by key BoE officials that has left a 50bp or 75bp hike next week "on a knife edge".
- That has cratered BoE pricing - while the September decision remains a close call, further out the strip we've seen more dramatic moves: June 2023 implied was 4.45% this morning, but It has dropped as far as 4.10%.
- Today's 2Y yield drop is being compared to the 25bp drop by the close on June 24, 2016 (post Brexit referendum). Before that you'd have to go to Feb 2009 for a bigger drop (just under 30bp).
- 2Y yields are now off 30bp from the post-2008 high set yesterday. To put this into perspective though, 2Y yields are still up 78bp vs a month ago, and traded with a 1-handle as recently as August 11th.
- And put into the context of broader short-end volatility (August saw two 20+bp daily moves) , today's drop looks more of a retracement after a sharp move higher than a fundamental change of direction.
SONIA: SONIA FIX - 07/09/22
Sep-07 11:16
- TISONI1M 2.1801 0.0150
- TISONI3M 2.5689 0.0103
- TISONI6M 3.1226 0.0195
- TISONI1Y 3.7630 0.0199
LIBOR: US FIX - 07/09/22
Sep-07 11:13
- US00O/N 2.31243 0.00143
- US0001M 2.70457 0.01971
- US0003M 3.19400 0.02614
- US0006M 3.75214 0.04185
- US0012M 4.18886 0.01829
