The Weekly Report

  • The week ends on a cooler note after four days of brisk action. Trading volume this morning was on par for payroll Friday, then had no need for adjustments after Chair Powell’s remarks in mid-afternoon. Risk assets are in much the same position for bonds – waiting for next week’s developments, including the ECB meeting on Thursday and retail sales on Friday.
  • The week started with a bad data print, but for traders all was forgiven by Thursday. Yields saw the biggest two-day rise since early July from Sept 3 to Sept 5, as good news stole the headlines. Traders didn’t know exactly what to make of August payroll numbers, particularly at first look. The odd combination of reactive trading to some news and zero reaction to equally important news keeps our recommendations in favor of buying bond price declines that stay within the range.
  • Global risk appetite improved as soon as investors learned the US and China would sit down for trade talks in early October. Optimism for the meeting is not that high yet, but talking is better than exchanging trade barbs on a daily or weekly basis. Improved risk sentiment did not bring enough conviction, however, to break any of the ranges on key bellwethers such as gold, currencies, etc. Nine charts cover the highlights.
  • August’s performance was one for the record books. Investors are still trying to make sense of the rally’s repercussions, some of which were felt this week. The review of financial market returns walks through all the major components.
  • This week's cover is of particular note, condensing the Fed's new study how trade uncertainty hurts GDP to one chart and two conclusions. Few talked about this week, but the study underpins current Fed rate policy thinking for the next several months.
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