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Spinning the Strong Jobs Gain

US TSYS

Tsys (30YY at 4.204% vs. 4.2627% high) AND stocks rebounding (ESZ2 +56.25 at 3784.0) off post-data lows as desks spin the strong jobs gain.

  • One desk notes the October gain of +261k is "strong but lagging. Maybe the pre-open premium sellers have it exactly right: long dated assets hold or actually rally a touch; shorter end mired." Stronger jobs for now (up-revisions not surprising) but a slow-down IS coming as companies lay-off revise needed office space. "Any companies that had 2yr or below debt that need to roll are going to be crushed" they add.
  • STIR update: Fed funds effective 3.83%.
    • Terminal Funds rate easing 5.155% vs. 5.18% earlier.
    • Dec 2022: 59.5bp cumulative hikes to 4.42% (135bp to 4.43% earlier)
    • Feb 2023: 101bp cumulative hikes to 4.84% (177bp to 4.85% earlier)
    • Mar 2023: 121bp cumulative hikes to 5.04% (199bp to 5.07% earlier)
    • May 2023: 131bp cumulative hikes to 5.13% (209bp to 5.17% earlier)
    • Peak Fed funds at June 2023 -July 2023 (5.155%)

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