Beyond the Headlines

Nonfarm payrolls growth exceeded expectations for a 14th consecutive month in May, with 339,000 jobs added vs. 195,000 expected. Further, the prior two months were revised higher by 93,000 jobs. The headline unemployment rate rose 30 basis points to 3.7% thanks to a...

A manufactured crisis appears to be averted after the House easily passed the debt ceiling bill by a 314-117 vote. The legislation is expected to pass the Senate by Saturday at the latest, avoiding a default early next week. Treasuries are little changed on the news...

Weaker than expected economic data overseas is fueling a modest rally in front-end Treasury yields to start the day. In Europe, local/regional data released today suggests that tomorrow’s Eurozone CPI report could come below expectations. In Asia, China reported that...

Intermediate and long-end Treasury yields are 4-7 basis points lower following reports that a debt ceiling deal has been reached ‘in principle.’ The House is expected to vote on the legislation on Wednesday, and it is expected to face opposition from hardliners in...

Treasury yields were initially lower to start the day but have since reversed following another stubbornly high inflation report. Core PCE rose 0.4% m/m in April versus expectations of a 0.3% increase, and on a year-over-year basis, the core measure rose to 4.7% from...

Fitch Ratings put its AAA rating for the U.S. government on negative watch for a potential downgrade yesterday. The rating agency attributed its decision to “brinkmanship over the debt ceiling” and “a failure of the U.S. authorities to meaningfully tackle medium-term...

Treasury yields are close to unchanged this morning but futures on the Dow and S&P are down 0.28% as debt ceiling talks continue to monopolize investors’ attention. News out of Washington shows the White House and Congress are far apart on key issues as...

The debt ceiling continues to weigh on the market with Treasury yields up again this morning. The 2-year is up nearly 50 bps to 4.38% after selling off for eight consecutive days while T-bills with early June maturities continue to push higher. President Biden and...

Treasury yields are modestly higher and the curve steeper amid an improved risk tone. Fed hawk Neel Kashkari (Minneapolis Fed) said he is open to skipping a rate hike at the next meeting. On the debt ceiling front, House Speaker McCarthy says he will resume...

Treasury yields are 6 to 7 bps higher this morning following hawkish comments from Fed officials. Dallas Fed President Lorie Logan stated that the data hasn’t yet made the case for pushing pause on rate hikes. The 2-year, which is more sensitive to monetary policy,...

Treasuries are little changed to start the day following a relatively quiet overnight session. S&P 500 futures are up 0.35% approximately 30 minutes ahead of the open, and the KRE regional bank ETF is up 2% in pre-market trading. The MBA mortgage activity index...

Weaker than expected economic data out of China fueled a modest bid for Treasuries overnight. After showing more promise to start the year, China’s recovery appears to be losing steam according to recent data releases. Industrial output growth was a little more than...

Treasury yields are modestly higher and the curve steeper following more hawkish commentary from Fed officials, as well as Treasury Secretary Yellen’s suggestion that debt ceiling talks are progressing. Additionally, the European Union lifted its forward inflation...

Treasury yields are 2 to 3 bps higher this morning on the back of strong earnings and news that a deal to raise the debt ceiling is closer. President Biden and House Speak McCarthy postponed their Friday meeting so that staffers could continue to hash out the details....

A risk-off trade has emerged to start the day with regional banks back in the headlines. Treasury yields are down 8-9 basis points in near-parallel fashion across the curve after PacWest Bancorp reported that deposits fell 9.5% after the bank said last week that it...

The April CPI report came in right on top of expectations. Both the headline and core readings rose 0.4% m/m, and on a year-over-year basis, core CPI was up 5.5% in April, as expected and down slightly from last month’s 5.6% y/y reading. The headline figure did come...

Treasuries are little changed as the market awaits tomorrow’s April CPI report. Yesterday’s senior loan officer survey from the Fed showed continued credit tightening from U.S. lenders in Q1, as well as reduced demand for credit, but there weren’t yet signs of a...

Troubled regional bank stocks are trading higher for a second consecutive day in pre-market trading, which is fueling additional retracement in Treasury yields from last week’s overbought conditions. The stock price of embattled PacWest is up another 40% more than an...

Treasury yields are higher after another upside surprise from the April jobs report. Nonfarm payrolls added 253,000 jobs last month, well above consensus expectations of a 185,000 increase, and the headline unemployment rate ticked back down to a new cycle low of...

Treasury yields are leaking higher this morning despite more negative regional bank headlines. PacWest’s stock plunged more than 60% in after-market trading yesterday when news leaked that the bank was “weighing strategic options.” Western Alliance (WAL), considered...