Macro Horizons
Wake Bonds Up, When November Ends
Nov 1, 2024
The hosts dive into the U.S. Treasury market's recent turmoil, driven by disappointing employment data and looming elections. They unravel the October labor market insights, linking job growth to inflation and market reactions. The conversation shifts to Treasury auction trends and funding forecasts amidst political uncertainties. Market dynamics are explored, highlighting the dollar's stronghold and its interplay with global economic shifts. Finally, they examine how upcoming election outcomes could drastically influence the treasury market and bond yields.
21:35
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Quick takeaways
- The recent slowdown in job creation, influenced by external factors like hurricanes, complicates the Federal Reserve's decision-making process on interest rates.
- The uncertainty of the upcoming presidential election could significantly affect yield curves and fiscal policies, impacting economic growth and inflation expectations.
Deep dives
Impact of Employment Data
The recent employment report revealed a significant slowdown in job creation, with only 12,000 jobs added in October, falling far short of the 100,000 consensus forecast. Notably, September's job numbers were also revised downwards, indicating a total negative revision of 112,000 over two months. The unchanged unemployment rate, which rounds to 4.1%, masks the reality that a category of workers unable to work due to bad weather surged to 512,000, much higher than the typical 55,000 average for October. This suggests that external factors, particularly hurricanes, have distorted the employment figures, complicating the Federal Reserve's decision-making process moving forward as they grapple with these unusual data trends.
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