US equity futures pointed to a lower open this morning as the trade outlook dimmed after President Trump threatened an additional 10% tariffs on Chinese imports yesterday. President Trump announced a new round of tariffs on roughly about $300 billion of Chinese imports in a series of tweets which will become effective on September 1st. China said it will have to take countermeasures if the US follows through. President Trump is also scheduled to make a trade announcement on the European Union later on Friday. Risk-off mood continued this morning from the muddier trade outlook and the “hawkish” rate cut from the Fed earlier this week. Treasuries maintained gains from the surge in previous session with benchmark ten-year bond yields trading near the lowest level since 2016 while the dollar also steadied. Elsewhere, WTI crude bounced back this morning, trading above $55 a barrel after its 8% slide on Thursday.
The Change in Nonfarm Payrolls in July came in just shy of 165k consensus at 164k following a downwardly revised prior of 193k. However, the overall outcome was considerably weaker in light of downward revisions and a pullback in the workweek. The YoY change in wages rose 3.20% from both prior and consensus of 3.10% which may help support the Fed’s recent stance on the trajectory of interest rates. Unemployment Rate steadied at 3.70% from the same reading in prior vs. 3.60% consensus. Trade deficit in June narrowed to $55.20 billion from revised prior of $55.30 billion vs. $54.60 billion consensus. Factory Orders in June rose 0.60% from a downwardly revised prior of -1.30% vs. 0.70% consensus. However, the headline Durable Goods Orders slightly edged lower to 1.90% from 2.00% prior and the core also declined to 1.00% from 1.20% prior. Lastly, University of Michigan Sentiment printed 98.40 vs. 98.50 consensus.
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US equity futures pointed to a lower open this morning as the trade outlook dimmed after President Trump threatened an additional 10% tariffs on Chinese imports yesterday. President Trump announced a new round of tariffs on roughly about $300 billion of Chinese imports in a series of tweets which will become effective on September 1st. China said it will have to take countermeasures if the US follows through. President Trump is also scheduled to make a trade announcement on the European Union later on Friday. Risk-off mood continued this morning from the muddier trade outlook and the “hawkish” rate cut from the Fed earlier this week. Treasuries maintained gains from the surge in previous session with benchmark ten-year bond yields trading near the lowest level since 2016 while the dollar also steadied. Elsewhere, WTI crude bounced back this morning, trading above $55 a barrel after its 8% slide on Thursday.
The Change in Nonfarm Payrolls in July came in just shy of 165k consensus at 164k following a downwardly revised prior of 193k. However, the overall outcome was considerably weaker in light of downward revisions and a pullback in the workweek. The YoY change in wages rose 3.20% from both prior and consensus of 3.10% which may help support the Fed’s recent stance on the trajectory of interest rates. Unemployment Rate steadied at 3.70% from the same reading in prior vs. 3.60% consensus. Trade deficit in June narrowed to $55.20 billion from revised prior of $55.30 billion vs. $54.60 billion consensus. Factory Orders in June rose 0.60% from a downwardly revised prior of -1.30% vs. 0.70% consensus. However, the headline Durable Goods Orders slightly edged lower to 1.90% from 2.00% prior and the core also declined to 1.00% from 1.20% prior. Lastly, University of Michigan Sentiment printed 98.40 vs. 98.50 consensus.
The curve has bull-flattened with UST 10-Year yield down 2.78 bps.