dChan - Q Origins Project Archive

Treasuries sold off sharply with front-end yields rising 15 basis points after data showed a blockbuster gain in US employment in January, while wage growth continued to moderate. The data flew in the pace of a pronounced slide in yields following Wednesday’s Federal Reserve meeting, even as the central bank said additional rate increases were likely. The US labor market created 517,000 new jobs last month, exceeding a forecast gain of 188,000. Wage gains moderated to a 4.4% pace over the past year with the unemployment rate falling more than forecast to 3.4%.

The data “helps reconcile the divergence between market pricing and Fedspeak,” said Gregory Faranello, head of US rates trading and strategy for AmeriVet Securities. The rise in short-term yields corresponded to a hawkish repricing of swap contracts indicating the anticipated path of Fed policy. The expected peak in June rose to nearly 5%, having traded below 4.90% earlier this week. The December contract jumped as much as 18 basis points to 4.59%, trimming expectations for rate cuts after the peak. The latest jobs data dented bullish bond-market sentiment that weaker economic conditions in the coming months will keep the Fed from delivering on the additional rate increases policy makers still anticipate.

The 10-year yield rose nearly 12 basis points to 3.51%, and was little changed on the week after falling to 3.33% on Thursday. “Numbers like this make it difficult to stay at the yield levels we have witnessed this week and it calls into question a two-year near 4% when the Fed is still raising rates,” said Kevin Flanagan, head of fixed income strategy at Wisdom Tree Investments. “This report was solid across the board.” (doesn't know or admit it's been an average of the last 10 years and is in no way empirical) Attention will now turn to Fed chair Jerome Powell when he speaks next week and whether he pushes back harder on a bond market that is still pricing in rate cuts later this year, while benchmark Treasury yields still trade below the current policy band of 4.5% to 4.75%. “Powell told us that the jobs numbers will determine Fed decision making from here and if the labor market can manage to hold up, they won’t cut rates and it will add to the volatility in the market,” said Flanagan.

https://www.bnnbloomberg.ca/treasury-yields-surge-on-blockbuster-january-employment-growth-1.1878976

Next paltry hike still pegged at 25bp (just like after the last meeting-and will stay there) and they will not go higher-to 50bp-cause they have to declare "victory" before the election season starts up in earnest later this year

https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html

>>18276431

Planefag Yerp Activity: Canadian AF with a drop off-CFC2967 130J Hercules-and another CFC2965 C-130J on ground at Rzsezow Airport-Poland, PERSE71 G550-AEW&C (Airborne Early Warning and Control) NE from Rome and should set up over NE Poland-the Israeli and Singapore AF haz one of these as well, Italian AF IAM3170 Falcon 50 departed Prague SE and IAM3118 Falcon 900 west from Baku, Canklestan and RAF RRR7203 Rivet Joint about to get a tank of gas from RAF KAYAK31 KC-3 MRTT (Multi-Role Tanker Transport) over eastern Romania