Missed It By That Much

So, of course, the U.S. Treasury (UST) market rallied on this ”large NFP miss,” right? Not so fast, after a knee-jerk positive reaction, the UST 10-year yield rose about +5 basis points (bps) to 1.33%, as of this writing.

From a technical perspective, the one-year Fibonacci analysis for the ten-year placed 1.3265% as the next retracement level to the upside. A close above this level opens the door to a potential next stop of roughly 1.50%. The UST 10-year yield hasn’t been at 1.50% on a sustained basis in about three months.

Finally, the Federal Reserve (Fed). I don’t think this NFP disappointment necessarily stops the Fed from tapering later this year, but you will need to see some rebound in job creation in upcoming reports to keep this timeline on track. Remember, from here on out, the policymakers will be emphasizing their ‘maximum employment’ goal when making future policy decisions.

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Unless otherwise stated, all data sourced is Bureau of labor statistics as of 9/3/2021.

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