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Strong Jul/Aug Uprevisions Keep Taper Annc Expectations Alive

US TSYS
While the Sep jobs gain of +194k fell far short of +500k expectations early Friday, large total uprevisions of +169k to July and August helped keep expectations of a taper annc at the Nov FOMC alive.
  • Contributing factors: drop in unemployment to 4.8%, longer avg workweek and strong earnings growth should give green light to Fed taper announcement in Nov.
  • Sharp two-way trade post-data, as 30Y Bonds blipped higher on the consensus miss before the revision gain took hold and initial data point evaporated. Yield curves bounced (5s30s tapped 113.9 high) as bonds extended session lows from mid- into late morning trade.
  • Aside from the initial excitement and decent volumes, tempo fell off in the second half as accts that were already squared and pared migrated back to the sidelines ahead the extended Columbus Day holiday weekend.
  • No significant data until Wed next week w/Sep CPI (MoM 0.3% est/YoY 5.3% est) and Sep FOMC Minutes release later in the session.
  • The 2-Yr yield is up 1bps at 0.3158%, 5-Yr is up 2.5bps at 1.0465%, 10-Yr is up 2.8bps at 1.6013%, and 30-Yr is up 3.2bps at 2.1582%.

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