Performance in risk markets is improved for a second consecutive day, boosted by positive trade headlines (or at least not negative). Treasury yields are higher and the curve steeper this morning in response to the risk-on trade, as well as reports that the Treasury Department is considering ultra-long bond issuance (potentially 50yr and 100yr maturities). Late Friday Reuters reported that Huawei will receive a 90-day extension from the Commerce Department, and President Trump and other White House officials made positive statements over the weekend with regards to trade discussions, which is certainly not new.

This week’s economic calendar is relatively light with regards to data releases (none scheduled until Wednesday), but there will be closely watched events over the next several days, particularly on the monetary policy front. The minutes of the July 31 FOMC meeting will be closely scrutinized upon release on Wednesday afternoon, and Fed Chair Powell will be speaking at the Jackson Hole symposium on Thursday. The general market expectation is that Powell will set the table for a September rate cut, and many will be listening for any clarification of his “mid-cycle adjustment” characterization following the July 31 FOMC meeting. On the data front, preliminary (flash) August PMI data for the U.S. and other major economies will be released on Thursday.

Jason Haley
Managing Director, Investment Management Group