Last week was a big one for data with lots of important releases making headlines. There was a strong rally across the curve with 2-year Swaps down 18 BPS and 10-year Swaps down 16 BPS. This was the largest weekly decline year to date, but rates remain elevated, nonetheless. The week started out poorly with the Employment Cost Index figures coming in higher than expected (2% on the quarter vs. 1% surveyed). On Wednesday, JOLTS figures came in softer than expected, which was good to see. ISM Manufacturing numbers were generally soft to target, but there was a pickup in prices paid on the manufacturing side.
During his speech on Wednesday, Powell was not as hawkish as many feared he’d be, and his tone caused rates to come down. Thursday’s Productivity numbers came out weaker than expected, while Friday’s Payroll numbers were both softer than expected and softer than the month prior.
This week will be much quieter on the data front. The Treasury is bringing $125 Billion of 3-year, 10-year and 30-year bonds to the market this week. We’ll also be getting lots of Fed speak, and it’s likely a lot of the governors will be hawkish.
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