Market Roundup: Data Headwinds

Tsys trading near session highs ahead midday, decent volumes (TYU >965k), curves flatter with short end underperforming: 2s10s -31.676 inverted low just off last week's 22Y low of -32.142.

• Data headwinds: The US ISM Manufacturing PMI edged down a modest 0.2pp to 52.8 in July, coming in stronger than the forecast of 52.0. This is the lowest since June 2020 and was the second consecutive month of decline for the indicator. It continues to remain in expansive territory above the 50-point threshold.
  
• Substantial fall was seen in the prices paid index, which plunged 18.5 points to 60.0, the lowest since August 2020. This is a much slower price growth. Volatility in commodity markets underscores this steep decline, with a significant 21.5% of respondents paying less in July (compared to June).
• Meanwhile, June construction spending declined -1.1% vs. +0.1% estimate, carry-over slowdown in economic data from last week a headwind for more aggressive Fed pricing at the Sep 21 FOMC.
• Limited data on tap for Tuesday: JOLTS Job Openings (10.994M est) and vehicle sales throughout the day. Larger focus on Friday's July employment data (+250k est vs. +372k prior).
• Current cross assets: spot Gold +3.65 at 1769.57, Crude falling: WTI -5.30 at 93.32, stocks marginally higher/near session highs ESU2 +2.0 at 4135.5
• Currently, 2-Yr yield is up 1.6bps at 2.9005%, 5-Yr is down 1.7bps at 2.6592%, 10-Yr is down 4.1bps at 2.6073%, and 30-Yr is down 6bps at 2.9501%.