July 7, 2022 Headlines

Treasury yields are modestly higher and steeper amid an improved risk tone in global markets overnight. The minutes of the June 15 FOMC meeting released yesterday afternoon painted a picture of a Fed worried about an overheated labor market and “entrenched” inflation expectations. The latter was most certainly influenced by the 30 bps increase in consumer long-run inflation expectations to 3.3% in the preliminary May University of Michigan survey, which was released on June 10. The minutes are obviously a little stale in a fast-moving environment, and since that time, the final update of that same report showed long-run inflation expectations up only 10 bps to 3.1%. Additionally, the Bloomberg Commodity Index has fallen nearly 20% since June 9. The job openings data released yesterday were higher than expected, but they are clearly trending lower since the peak in March. Does that ease the worries of Fed leaders? Time will tell, but the combination of the hawkish FOMC minutes and yesterday’s economic data was enough to give back some of the rally of the last two weeks in Treasuries.

Jason Haley
Chief Investment Officer

Date	Event	Surv(M)	Actual	Prior	Revised
07/05/22	Factory Orders	0.50%	1.60%	0.30%	0.70%
07/05/22	Factory Orders Ex Trans	—	1.70%	0.30%	0.60%
07/05/22	Durable Goods Orders	0.70%	0.80%	0.70%	—
07/05/22	Durables Ex Transportation	0.70%	0.70%	0.70%	—
07/05/22	Cap Goods Orders Nondef Ex Air	0.50%	0.60%	0.50%	—
07/05/22	Cap Goods Ship Nondef Ex Air	—	0.80%	0.80%	—
07/06/22	MBA Mortgage Applications	—	-5.40%	0.70%	—
07/06/22	S&P Global US Services PMI	51.6	52.7	51.6	—
07/06/22	S&P Global US Composite PMI	51.2	52.3	51.2	—
07/06/22	ISM Services Index	54	55.3	55.9	—
07/06/22	JOLTS Job Openings	11000k	11254k	11400k	11681k
07/06/22	FOMC Meeting Minutes	—	—	—	—
07/07/22	Challenger Job Cuts YoY	—	58.80%	-15.80%	—
07/07/22	Trade Balance	-$84.7b	-$85.5b	-$87.1b	-$86.7b
07/07/22	Initial Jobless Claims	230k	235k	231k	—
07/07/22	Continuing Claims	1328k	1375k	1328k	1324k
07/08/22	Two-Month Payroll Net Revision	—	—	—	—
07/08/22	Change in Nonfarm Payrolls	268k	—	390k	—
07/08/22	Change in Private Payrolls	235k	—	333k	—
07/08/22	Change in Manufact. Payrolls	23k	—	18k	—
07/08/22	Unemployment Rate	3.60%	—	3.60%	—
07/08/22	Average Hourly Earnings MoM	0.30%	—	0.30%	—
07/08/22	Average Hourly Earnings YoY	5.00%	—	5.20%	—
07/08/22	Average Weekly Hours All Employees	34.6	—	34.6	—
07/08/22	Labor Force Participation Rate	62.40%	—	62.30%	—
07/08/22	Underemployment Rate	—	—	7.10%	—
07/08/22	Wholesale Inventories MoM	2.00%	—	2.00%	—
07/08/22	Wholesale Trade Sales MoM	—	—	0.70%	—
07/08/22	Consumer Credit	$30.000b	—	$38.069b	—

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