October Employment Data Focus, Fed Speakers Resume

Tsys trading moderately lower, yields mixed (30YY +.009 at 4.191%, 10YY -.0053 at 4.1416%) in lead-up to this morning's employment data for October (+195k est vs. +263k prior).

• While an in-line reading or higher would deliver a modestly hawkish reaction, with the FOMC meeting this week renewing policymakers’ concern that they haven’t yet seen much softening in the labor market -- impending layoffs in tech sector (Twitter) may be start of broader based slow-down.
• Fed speak resumes: Boston Fed Collins on economy/policy outlook (text and Q&A) and CNBC interview Richmond Fed Pres Barkin both scheduled at 1000ET.
• STIR: Terminal Funds rate has climbed to 5.18% - consistent with Powell's message that the FOMC will likely raise its terminal rate estimates at the next meeting, and that it's "very premature to be thinking about pausing".
  
  • Dec 2022: 135bp further cumulative hikes to 4.43% (61bp prior)
  • Feb 2023: 177bp cumulative hikes to 4.85% (102bp prior)
  • Mar 2023: 199bp cumulative hikes to 5.07% (125bp prior)
  • May 2023: 209bp cumulative hikes to 5.17% (134bp prior)
  • Peak now split between May and June 2023 (5.17%-5.18%)