Treasury Yields Surge in Response to US-China Negotiation Updates
Market opened today’s session with treasuries dropping lower across all maturities. 10-YearTreasury yield is at 1.5772, 11.15 bps increased from prior closing of 1.4657.
Stocks surged after the US and China agreed to hold another round of trade negotiations next month in Washington DC. The Dow Jones jumped 459 points to 1.70%, the S&P 500 advanced 1.50% (led by a 2.70% gain in the financials sector, and traded around 1.50% from its record high), and the Nasdaq climbed 1.80%. Market participants are leaning towards another rate cut when the Federal Reserve holds its next meeting in two weeks. At the last meeting, the Federal Open Market Committee cut rates by a quarter point for the first time in over ten years. Trump continues to pressure the Federal Reserve for more rate cuts, and said in August that the rates should be cut by at least 1%. The yield on the 10-YearTreasuries climbed 6 basis points to 1.53%, while gold dipped 1.60% to $1,528.39 an ounce and silver sank 1.60% to $19.29 per ounce. However, West Texas Intermediate crude oil rose 0.90% to $56.73 a barrel. The US Treasury will offer $40 billion and $55 billion at its weekly auction of eight-week bills and four-week bills, respectively.
According to ADP and Moody’s Analytics, private payrolls in the US increased by 195,000 after a revised 142,000 gain in July. The report also showed goods-producing jobs rose by 11,000 (led by factories), and employment at service providers increased by 184,000, with a significant increase in health care, social assistance, and leisure and hospitality. State claims showed 26 states/territories reporting increased claims, while 27 reported lower filings for unemployment benefits in the week ending August 24th. New York and Texas showed the largest level increase, while California and Michigan led those reporting fewer. US companies added the most jobs in four months in August while unemployment filings stayed low last week, near the lowest level since 1969. These reports suggested the labor market remains strong despite a slowdown in manufacturing and global weakness. 24% of US manufacturers reported weaker export orders in August, the largest share since April 2009. Only furniture and food producers reported export growth for the month as slowing global demand and trade wars continue to take a toll on manufacturing.
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Stocks surged after the US and China agreed to hold another round of trade negotiations next month in Washington DC. The Dow Jones jumped 459 points to 1.70%, the S&P 500 advanced 1.50% (led by a 2.70% gain in the financials sector, and traded around 1.50% from its record high), and the Nasdaq climbed 1.80%. Market participants are leaning towards another rate cut when the Federal Reserve holds its next meeting in two weeks. At the last meeting, the Federal Open Market Committee cut rates by a quarter point for the first time in over ten years. Trump continues to pressure the Federal Reserve for more rate cuts, and said in August that the rates should be cut by at least 1%. The yield on the 10-Year Treasuries climbed 6 basis points to 1.53%, while gold dipped 1.60% to $1,528.39 an ounce and silver sank 1.60% to $19.29 per ounce. However, West Texas Intermediate crude oil rose 0.90% to $56.73 a barrel. The US Treasury will offer $40 billion and $55 billion at its weekly auction of eight-week bills and four-week bills, respectively.
According to ADP and Moody’s Analytics, private payrolls in the US increased by 195,000 after a revised 142,000 gain in July. The report also showed goods-producing jobs rose by 11,000 (led by factories), and employment at service providers increased by 184,000, with a significant increase in health care, social assistance, and leisure and hospitality. State claims showed 26 states/territories reporting increased claims, while 27 reported lower filings for unemployment benefits in the week ending August 24th. New York and Texas showed the largest level increase, while California and Michigan led those reporting fewer. US companies added the most jobs in four months in August while unemployment filings stayed low last week, near the lowest level since 1969. These reports suggested the labor market remains strong despite a slowdown in manufacturing and global weakness. 24% of US manufacturers reported weaker export orders in August, the largest share since April 2009. Only furniture and food producers reported export growth for the month as slowing global demand and trade wars continue to take a toll on manufacturing.
The curve has bear-flattened with UST 10-Year yield up 11.15 bps.U.S. Federal Reserve ReleasesBeige
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