Yields March Upward Despite Geopolitics | Morning Express 10/10/2022
Posted: Oct. 10, 2022, 8:38 a.m.
- Do not miss our weekly Top Things to Watch this Week, out every Sunday.
- Escalation of Russia-Ukraine war. On Saturday, Ukraine bombed a road and rail bridge connecting Russia to Crimea, a crucial military supply point. Russian President Putin has called this a “terrorist attack”, ordering retaliation that has struck civilian infrastructure across Ukraine, including Kyiv.
- Nonfarm Payrolls on Friday was arguably hot with 263k job topping estimates at 250k, even though Government Jobs fell 25k. Although wage growth was in line at +0.3% MoM and a touch light at +5.0% YoY vs +5.1% expected, the report was highlighted by a fall in the Unemployment Rate. The headline U3 rate fell from 3.7% to 3.5% and U6 fell from 7.0% to 6.7%. Furthermore, the Participation Rate fell one tenth to 62.3%.
- The Federal Reserve is trying to hurt the economy and push individuals back into the work force. Regardless of the soft Wage Growth, this number was exactly the opposite of what the Fed wants to see.
- Today is Columbus Day, a banking holiday with the physical bond market closed.
- Despite escalating geopolitical tensions, yields continue to march higher. U.S. 10-year is back retesting 3.9% with much of that move coming last week through Friday. The U.S. 2-year is back above 4.30%.
- U.K. 10-year Gilts rise 13bps back to 4.40% The Bank of England said it will increase its buying operation over the next five days, in hopes of easing liquidity pressures. U.K. fiscal plans will remain front and center. The British Pound is only off slightly on the day.
- China’s Caixin Services PMI plunged in data released Friday night at 49.3 versus 54.5.
- China returns from Golden Week today with the Yuan losing ground for the fourth straight day against the U.S. Dollar.
- IMF Meetings begin in Washington D.C. today.
- Fed Vice Chair Brainard speaks at 12:35 pm CT. Heavy Fed speak this week leads into PPI Wednesday and CPI Thursday.
E-mini S&P (December) / NQ (December)
S&P, yesterday’s close: Settled at 3653.25, down 103.50 on Friday and up 51.75 on the week
NQ, yesterday’s close: Settled at 11,101.50, down 440.25 on Friday and up 66.00 on the week
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NQ (December)
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Crude Oil (November)
Yesterday’s close: Settled at 92.64, up 4.19 on Friday and 13.15 on the week
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Gold (December) / Silver (December)
Gold, yesterday’s close: Settled at 1709.3, down 11.5 on Friday and up 37.3 on the week
Silver, yesterday’s close: Settled at 20.255, down 0.405 on Friday and up 1.216 on the week
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Silver (December)
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