Treasuries are modestly lower across the curve this morning from yesterday’s close. The UST10-Year yield is currently at 3.173% after closing at 3.131% prior.
Treasuriesfell overnight and into the open ahead of the October employment reports as global optimism turned higher on news that the U.S.-China trade rhetoric may be making progress on resolving differences. U.S. stock futures fell after disappointing earnings results from Apple after yesterday’s close, but losses were quickly reversed on reports that President Trump requested U.S. officials to draft potential terms of a trade deal with China ahead of his scheduled meeting with President Xi later this month. This morning treasury yields climbed higher after the jobs reports rebounded more than expected in October; the dollar rose on the data as it provided further support for the Fed’s rate-hike path. The next FOMC meeting will be held next week, and while another rate hike is unexpected, the Fed will likely emphasize their hawkish views on the upbeat economic conditions.
The October Nonfarm Payrolls rose 250k which exceeded expectations as market consensus called for 200k additional jobs; September’s data was revised down from 134k to 118k. Private Payrolls also increased more than expected at 246k versus 195k per consensus, and Manufacturing Payrolls gained 32k versus 16k per consensus. Moreover, the Unemployment Rate remained unchanged as expected at 3.70%, while the Underemployment Rate ticked down from 7.50% to 7.40% MoM. Average Earnings met expectations as Hourly Earnings gained 0.20% MoM which saw a climb in its YoY level from 2.80% to 3.10%. Labor Force Participation Rate was marginally higher in October at 62.90% versus 62.70% prior. We also received the September Factory Orders which rose 0.70% following an upwardly revised 2.60% gain prior. Durable Goods Orders rose 0.70% following a 0.80% increase prior, but was unchanged at 0.00% MoMexcluding transportation. Lastly, both the Capital Goods Orders Nondefense and Capital Goods Shipments excluding Air fell 0.10% in September.
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Treasuries fell overnight and into the open ahead of the October employment reports as global optimism turned higher on news that the U.S.-China trade rhetoric may be making progress on resolving differences. U.S. stock futures fell after disappointing earnings results from Apple after yesterday’s close, but losses were quickly reversed on reports that President Trump requested U.S. officials to draft potential terms of a trade deal with China ahead of his scheduled meeting with President Xi later this month. This morning treasury yields climbed higher after the jobs reports rebounded more than expected in October; the dollar rose on the data as it provided further support for the Fed’s rate-hike path. The next FOMC meeting will be held next week, and while another rate hike is unexpected, the Fed will likely emphasize their hawkish views on the upbeat economic conditions.
The October Nonfarm Payrolls rose 250k which exceeded expectations as market consensus called for 200k additional jobs; September’s data was revised down from 134k to 118k. Private Payrolls also increased more than expected at 246k versus 195k per consensus, and Manufacturing Payrolls gained 32k versus 16k per consensus. Moreover, the Unemployment Rate remained unchanged as expected at 3.70%, while the Underemployment Rate ticked down from 7.50% to 7.40% MoM. Average Earnings met expectations as Hourly Earnings gained 0.20% MoM which saw a climb in its YoY level from 2.80% to 3.10%. Labor Force Participation Rate was marginally higher in October at 62.90% versus 62.70% prior. We also received the September Factory Orders which rose 0.70% following an upwardly revised 2.60% gain prior. Durable Goods Orders rose 0.70% following a 0.80% increase prior, but was unchanged at 0.00% MoM excluding transportation. Lastly, both the Capital Goods Orders Nondefense and Capital Goods Shipments excluding Air fell 0.10% in September.
The curve has bear-steepened with the UST 10-Year yield up 4.2 bps from prior closing.
Have A Nice Weekend!