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Early Bonds: After the US data bonds turned higher
The second estimate for Q2 GDP growth was marked down to 2.1% (consensus 2.4%) from the advance estimate of 2.4%. The GDP Price Deflator also got marked down to 2.0% (consensus 2.2%) from the advance estimate of 2.2%. The PCE Price Index got revised lower to 2.5% from 2.6%, as did the core-PCE Price Index, which checked in at 3.7% versus the advance estimate of 3.8%.
The key takeaway from the report is that it fits the soft-landing scenario; also, there were downward revisions to the inflation readings, which is something that will continue to drive the market’s belief that the Fed can refrain from another rate hike.
Yield:
2-yr: -7 bps to 4.84%
3-yr: -6 bps to 4.53%
5-yr: -4 bps to 4.24%
10-yr: -3 bps to 4.09%
30-yr: -2 bps to 4.22%Bond Wrap: U.S. Treasuries modestly higher led by 2-yr note
Crude #oil 5th consecutive gain
U.S. Dollar Index fell 0.3% to 103.19 near 103.10 200dma
Yield:
2yr -3 bps to 4.88%
3yr -3 bps to 4.56%
5yr UNCH at 4.27%
10yr UNCH at 4.12%
30yr -1 bp to 4.23%Treasuries are little changed from yesterday’s settlement levels following the data.
The key takeaway from the report would have to be the uptick in the year-over-year inflation readings. They weren’t of the eye-popping variety; however, they should catch the Fed’s eye as a basis not to cut rates anytime soon.
The key takeaway from the report is that initial claims — a leading indicator — continue to run at levels that are indicative of a tight labor market that goes hand-in-hand with an economy that is definitely not in a hard-landing pattern.
The 2-yr note yield is unchanged at 4.88% and the 10-yr note yield is down one basis point to 4.11%.
2-yr: UNCH at 4.88%
3-yr: +1 bp to 4.57%
5-yr: +1 bp to 4.28%
10-yr: -1 bp to 4.11%
30-yr: -1 bp to 4.22%In a week of mostly soft data U.S. Treasuries on Friday finished broadly lower lifting yields off their lowest levels in three weeks. U.S. Treasuries
[See the full post at: Bond Traders Weekly Outlook: Bond Market Has Not Bought into Fed’s Tightening Cycle Over]
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