Little Net Movement In Fed Pricing On Noisy JOLTS Data

The dovish move in Fed pricing sees a modest extension on the back of the softer-than-expected JOLTS job opening print, before upward revisions to the quits rate data help counter the move.

• The prior month’s JOLTS job openings print also saw a negative revision.
• Note that the headline print shows the shallowest level of job openings seen since Feb ’21, with the COVID induced jump higher in the metric continuing to unwind.
• A reminder that various rounds of Fedspeak have flagged an unexpected loosening in the labour market as a potential catalyst for cuts, albeit with more prominence given to higher-for-longer discussions as we moved into the pre-FOMC blackout period.
• The data leaves ~45bp of cuts priced into FOMC-dated OIS through year end (vs. 44bp pre-data).
• Just under 80% odds of a cut through the Sep FOMC are priced, with ~28bp of cuts priced through the Nov FOMC, little changed vs. pre-data levels.