Oct Jobs Strong, But Off Mid-Yr Pace, Short End Firm on Dovish Fedspeak
Tsy futures mixed after the bell, well off post-data lows: yield curves broadly steeper - near highs (2s10s +7.322 at -50.00 vs. -61.953 low) as earlier dovish Fed speak gained traction again: short end higher (Dec 2022: cumulative hikes slips 57.3 to 4.40% as Terminal Funds rate holds at 5.155% in June'23).
- Earlier comments from Fed speakers: Boston Fed Collins and Richmond Fed Barkin also helped stocks rally on the day. “I believe it is time to shift focus from how rapidly to raise rates, or the pace, to how high – in other words, to determining what is sufficiently restrictive,” Collins said. “Down the road, when we get there, in my view we’ll need to shift again to focus on how long to hold rates at that level.”
- Barkin headlines from CNBC: "UNSURE OF DECEMBER FOMC MOVE, MORE DATA STILL COMING .. CAN CREDIBLY SAY FED HAS `FOOT ON THE BRAKE'".
- Tsys sold-off after Oct NFP climbed +261k higher than estimated +195k, while Sep up-revised to +315k, Aug to +292k. Unemploy rate climbs to 3.7% - sources say "for the wrong reasons as the labor force participation rate and the share of workers with a job declined."
- Look ahead: Fed speakers and Tsy auctions outweigh data in the first half of next week. Focus on Oct CPI Wed morning: MoM 0.6% est vs. 0.4% prior