Last week saw unemployment hit a nearly 50-year low as employment conditions continue to tighten. Despite the lower-than-expected job creation in September, the unemployment rate fell to 3.7% from 3.9% as the economy added 134,000 new jobs plus positive revisions to prior months. For the week, 10-year Treasury yields rose to almost 3.25%, reaching a new high for the year and levels not seen since 2011. Selling also picked up steam during the week as key technical levels were exceeded.
This week will likely see more pressure on bonds with the release of key inflation data. Look for rates to move higher in the short term. If rates rise, I will be watching to see if the equity sell-off continues and how it may limit the rise in rates.
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