I first want to send my thoughts and well wishes to everyone enduring the impact of Hurricane Harvey in Texas.
Last week’s Jackson Hole Meeting was very uneventful from a market perspective as central banks kept their remarks very much in line with recent commentary. Janet Yellen's speech felt more like a farewell address than laying out future Federal Reserve (Fed) policy.
Bond traders will be in for a long wait this week going into the holiday weekend. The key piece of economic data to be released this week is the August employment report. Consensus expectations are for job gains to be 180,000 and for the unemployment rate to remain steady at 4.3%. If job gains come in as expected, it would match the average job gains for the year. I will be watching the average hourly earnings for any sign of wage inflation, which has remained stubbornly low despite the unemployment rate falling.
Bonds are trading at near lows for the year, and with instability on the horizon from the showdown of the debt ceiling in September, a very strong run of economic data will be needed to see yields rise. Watch for the Treasury bill auctions early this week for any market reaction to the upcoming debt ceiling negotiations.
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