Deposit Funding Compass

Deposit Funding Compass Week of October 4, 2023

Private US companies added the fewest number of jobs since the start of 2021 in September and pay growth slowed, pointing to a weakening in labor demand in several industries. Private payrolls rose 89k last month after climbing 180k in August. The rout in bond prices took a pause this morning on the heels of…
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Deposit Funding Compass Week of September 27, 2023

The latest surge in long-term interest rates to the highest levels in 16 years adds to a lengthening list of headwinds threatening to blow the US economy off a soft-landing course. 10-year Treasury yields are up over a percentage point since mid-May, reaching 4.56% Tuesday afternoon, the highest since October 2007. The latest leg-up in…
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Deposit Funding Compass Week of September 21, 2023

Applications for US unemployment benefits fell to the lowest level since January last week, indicating a healthy labor market that continues to support the economy. Bond traders are bracing for Treasury yields to keep pushing higher after the FOMC signaled it’s likely to hold interest rates at elevated levels well into next year. Two-year rates…
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Deposit Funding Compass Week of September 13, 2023

Core US inflation, which excludes food and energy costs, ran at a faster-than-expected monthly pace in August, leaving the door open for additional interest-rate hikes from the Federal Reserve. The advance was +0.3% from July, the first acceleration in six months. The report adds to concerns that the renewed momentum in the economy is reigniting…
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Deposit Funding Compass Week of September 7, 2023

Applications for US unemployment benefits fell to the lowest level since February, underscoring businesses’ reluctance to let go of workers.  Initial unemployment claims decreased by 13,000 to 216,000 in the week ended Sept. 2, Labor Department data showed Thursday. The figure was lower than all forecasts. Fed Funds futures have priced in a pause from the…
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Deposit Funding Compass Week of August 30, 2023

On the face of it, Federal Reserve Chairman Jerome Powell sounded hawkish enough at Jackson Hole to leave bond investors bracing for fresh volatility. Swap contracts moved after Powell’s speech to price in stronger odds for one more rate hike this year, but they are sticking with expectations for at least a couple of cuts…
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Deposit Funding Compass Week of August 23, 2023

US home purchase applications fell to the lowest level since 1995 and weak European data bolstered bets that major central banks will pause their interest-rate hikes to prevent a recession.  Traders also awaited a US preliminary revision of payrolls growth that’s seen adding fuel to the rate debate. Treasury two-year yields, which are more sensitive to imminent Federal Reserve moves,…
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Deposit Funding Compass Week of August 16, 2023

Traders betting that interest rates in the US will remain higher than inflation far into the future drove 10-year real yields to a 14-year high Monday. The “real”, or inflation-protected yield on 10-year Treasury debt climbed more than 6 basis points to 1.84% in late New York trading, the highest level since 2009. Nominal Treasury yields also…
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Deposit Funding Compass Week of August 10, 2023

A key measure of US consumer prices rose only modestly for a second month, bolstering hopes that the Federal Reserve can tame inflation without sparking a recession. The core consumer price index, which excludes often-volatile food and energy costs, rose 0.2% for a second month. That marked the smallest back-to-back gains in more than two…
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Deposit Funding Compass Week of August 2, 2023

The US Treasury boosted the size of its quarterly sale of longer-term debt for the first time in over 2 1/2 years, testing dealers’ appetites amid an increase in government borrowing needs so alarming it spurred Fitch Ratings to cut the US sovereign rating from AAA. Treasuries dropped in wake of the release, with benchmark…
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