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Headline September Employ Focus, Fed Gov Waller, UAW Conf

US TSYS
  • Cash Tsys running weaker, off late overnight lows on relatively narrow overnight range as markets await the September employment report at 0830ET. Consensus looks for payrolls growth of 170k, unemployment rate expected to re-correct lower, after August’s 3.80% was largely down to technical factors
  • Well off Wednesday's 16Y high of 4.8799%, Tsy 10Y yield currently +.0237 at 4.7422%. Curves steeper: 3M10Y +3.483 at -75.692, 2Y10Y +.495 at -30.111.
  • A technical bear trend in Treasuries futures remains intact, Tsy Dec'23 10Y futures at 107-04 (-6) above initial resistance of 106-03+/00 (Low Sep 4 / Round number support). This week’s fresh cycle lows confirm a resumption of the downtrend and maintain the price sequence of lower lows and lower highs.
  • Markets continue to discuss the higher for longer narrative and assess odds of an economic soft landing. Rate hike projections into early 2024 steady to a touch firmer: November at 22.2% w/ implied rate change of +5.6bp to 5.384%, December cumulative of 9.7bp at 5.426%, January 2024 8.4bp at 5.413%. Fed terminal at 5.430% in Jan'24.
  • Fed Gov Waller will attend a moderated discussion at the Brookings Inst at 1200ET, no text. UAW head Shawn Fain expected to hold a video conf regarding the worker strike at 1000ET.

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