Jobs day is here, Manchin demands pause on $3.5 trillion bill, and Fauci calls for three doses.
Jobs, jobs, jobs
All eyes are on today's nonfarm payrolls report for a window into the strength of the economic recovery, not to mention clues on where monetary policy is headed. Economists expect the U.S. added 725,000 jobs in August, a more moderate pace compared with the past two months but stronger than gains seen early this year. A bigger-than-expected number could fuel bets that the Federal Reserve will speed up the rollback of its bond-buying program, while a weak report could do the opposite. Meanwhile, Fed Chair Jerome Powell got a boost in his quest for a second term with an endorsement from House Budget Chair John Yarmuth of Kentucky.
Not so fast
Senator Joe Manchin muddied the outlook for President Biden's $3.5 trillion tax and spending package by demanding a “ strategic pause” on the proposal. At an event in his home state on Wednesday and in a Thursday Wall Street Journal op-ed, Manchin argued that rising inflation and a soaring national debt necessitate a go-slow approach and a “significantly” smaller plan. Manchin is a linchpin vote in the evenly divided Senate, and his objections cap a politically painful period for Biden, who has been grappling with a chaotic withdrawal from Afghanistan, a resurgent pandemic and Hurricane Ida.
Triple dose
White House chief medical adviser Anthony Fauci said in a briefing on Thursday that three doses of Covid-19 vaccine may become the standard regimen for most people. That comes after a study in Israel showed dramatic improvement in protection among recipients of three doses, Fauci said. Meanwhile, in Germany, authorities are warning of a “pandemic of the non-vaccinated” as the country seeks to convince millions more to get the shot. Japanese Prime Minister Yoshihide Suga said he plans to resign so he can devote the rest of his time in office to fighting the Covid-19 pandemic rather than campaigning for re-election.
Markets mixed
Global stocks are mixed ahead of today's U.S. jobs report. Overnight the MSCI Asia-Pacific Index rose 0.8% while Japan’s Topix index closed 1.6% higher. In Europe the Stoxx 600 Index was 0.1% lower at 5:40 a.m. Eastern Time. S&P 500 futures pointed to a small rise at the open, the 10-year Treasury yield was at 1.302%, oil hovered around $70 a barrel and gold climbed.
Coming up...
In addition to the nonfarm payrolls number and unemployment rate at 8:30 a.m., we get services and composite PMIs at 9:45 a.m. The Baker Hughes rig count is due at 1 p.m.
What we've been reading
Here's what caught our eye over the last 24 hours.
- Jim Simons, RenTech insiders to pay billions in back taxes.
- HSBC CEO plans for more hybrid work, less jet-setting.
- DAX Index to get growth boost in biggest ever makeover.
- Is the Supreme Court ready to overturn Roe?
- Japan investors are glad to see the back of an unpopular leader.
- Why New York’s subway keeps flooding.
- Is this the world's most beautiful mosquito?
And finally, here’s what Katie Greifeld’s interested in this morning
One of the fun things about bond market holidays is the mental energy that strategists expend on trying to put numbers to just how weird trading can get. For example, we learned from JPMorgan Chase & Co. in July that for all U.S. payroll releases since 2007 that coincided with an early market close before the U.S. July 4th holiday -- I truly don’t think you could get more niche -- the Treasury market is 1.5 times to 2 times more volatile than the average payrolls report day.
Well, it’s Wells Fargo’s turn to shine when it comes to Esoteric Bond Market Holiday Trading Stats. Mike Schumacher and Zachary Griffiths crunched the numbers, and found that since 2013’s taper tantrum, long-term Treasury yields have dropped on the Thursday before the three-day weekend in seven of eight years prior to 2021. Rates reversed course and rose on all but one of the pre-holiday Fridays during that period, their analysis showed.
So that’s fun, and there’s a few potential reasons why that pattern might exist. One theory comes from Wells Fargo Treasury trader Ray Johnson, who points out that month-end rebalancing effects might still be working through the bond market. Another is that traders likely want to offload duration heading into the long weekend and unofficial end of summer.
Of course, the added wrinkle is that this pre-holiday Friday also brings August’s employment report. That’s been the case roughly half the time heading into Labor Day weekend since 2001, and three of the four “aberrations” -- Treasury yields fall on Friday -- over that 20-year span have coincided with payrolls prints.
But to Schumacher and Griffiths, rates are more likely to push higher on the heels of an unexpectedly strong jobs print than they are to fall in the wake of a weak one. With that dynamic in mind, bet against bonds:
With this dynamic plus the historical pattern in mind, we advocate being short duration, or at least neutral, at the close this Thursday.
Follow Bloomberg's Katie Greifeld on Twitter at @kgreifeld
Like Bloomberg's Five Things? Subscribe for unlimited access to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close.
"day" - Google News
September 03, 2021 at 05:33PM
https://ift.tt/3zHj0co
Five Things You Need to Know to Start Your Day - Bloomberg
"day" - Google News
https://ift.tt/3f7h3fo
https://ift.tt/2VYSiKW
Bagikan Berita Ini
0 Response to "Five Things You Need to Know to Start Your Day - Bloomberg"
Post a Comment