{"id":1442867,"date":"2023-12-08T13:08:20","date_gmt":"2023-12-08T18:08:20","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1442867"},"modified":"2023-12-08T13:08:20","modified_gmt":"2023-12-08T18:08:20","slug":"bond-rally-hinges-on-jobless-rate-not-nfp-number","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/bond-rally-hinges-on-jobless-rate-not-nfp-number\/1442867\/","title":{"rendered":"Bond Rally Hinges On Jobless Rate, Not NFP Number"},"content":{"rendered":"

Bond Rally Hinges On Jobless Rate, Not NFP Number<\/span><\/p>\n

\n

Authored by Ven Ram, Bloomberg cross-asset strategist,<\/em><\/p>\n

If economists\u2019 forecasts are right, the most-dissected headline number from today\u2019s set of non-farm payrolls data is also perhaps the least important number for both Treasury traders and the Fed\u2019s dot plot that we will get next week.<\/p>\n

<\/a><\/p>\n

Rather, it is the jobless rate and the hourly earnings growth that will determine whether or not the rally of the past month in Treasuries comes to a stop.<\/strong><\/p>\n

Employers are estimated to have added 183k jobs in November. As long as the actual number is within, say, 145k to 156k – the first standard deviation of the predictions – it won\u2019t matter much to the markets or policymakers.<\/p>\n

Everyone and their pet poodle already knows the labor market is resilient,<\/strong> and another that shows more of the same isn\u2019t going to move the needle much.<\/p>\n

The market will care a lot more about the unemployment rate.<\/p>\n

<\/a><\/p>\n

That\u2019s especially against a backdrop where the average over the past three months is running at around 3.8%, considerably lower than the 4.1% rate that the Federal Reserve reckons is needed to bring the labor market back into balance. <\/strong><\/p>\n

A rate higher than the 3.9% that the markets have penciled in will give policymakers a greater degree of confidence that their cumulative policy tightening is funneling its way through the economy.<\/p>\n

A number lower than forecast turns the clock back as it were, and would put a full-stop to this ongoing rally in Treasuries.<\/p>\n

Average hourly earnings growth is estimated to slow to 4% from 4.1% in October.<\/strong><\/p>\n

<\/a><\/p>\n

Even so, a number along those lines would still keep inflationary pressures intact given that it would be well over the long-term average of 3%.<\/strong><\/p>\n

At around 4.60% on the two-year note and some 4.15% on the 10-year maturity, the markets have priced in all the news that is favorable for bonds – leaving\u00a0little room for error.<\/p>\n

Given the sheer velocity of the rally we have seen in the past month, traders may be looking for an excuse to take some money off the table.<\/strong><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nFri, 12\/08\/2023 – 08:08<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/bond-rally-hinges-jobless-rate-not-nfp-number<\/a>\u00a0<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Bond Rally Hinges On Jobless Rate, Not NFP Number Authored by Ven Ram, Bloomberg cross-asset strategist, If economists\u2019 forecasts are right, the most-dissected headline number…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-1442867","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pbimBl-63m3","jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1442867","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1442867"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1442867\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1442867"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1442867"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1442867"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}