Authored by Mike Shedlock via MishTalk.com,
The recent shift in the bond market sentiment reveals a growing concern over jobs and economic growth rather than inflation.
US Treasury Yield Notes
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From August 5 to August 21, bond yields for US treasuries with a duration of 2 years or longer experienced an increase.
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The period between August 21 and September 2 was particularly challenging for 30-year long bond holders but beneficial for others.
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Following September 2, there was a significant rally in the bond market across the board.
Treasury Yield Changes Since September 2
What Led to This Shift?
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The ISM report on September 2 indicated weak hiring trends.
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The BLS JOLTS report on September 3 highlighted a situation where unemployment exceeded job openings for the first time since the pandemic.
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The ADP report on September 4 showed weakness, particularly among small businesses.
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The nonfarm payroll report on September 5 was deemed disastrous.
The trajectory of the 10-year treasury note and the 30-year long bond has aligned once again, both heading downwards.
Ultimately, the focus has shifted from inflation concerns to job market weakness, although Powell remains cautious unless drastic circumstances arise.
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