The Federal Reserve Board has just joined Instagram
The aim is to "increase the accessibility and availability of Board news and educational content." Let see if the young generation finds this picture inspiring...
US job openings top all forecasts as white-collar positions jumped: equity markets tanking as US 10 year yields hit fresh 16y high with all of the increase is due to a rise in real yields
US 10y nominal yields is now at 4.73%, 10y real yields (nominal yields-10y inflation expectations) at 2.37%. THE FACTS - US job openings unexpectedly increased in August, fueled by a surge in white-collar postings, highlighting the durability of labor demand. - The number of available positions increased to 9.61 million from a revised 8.92 million in July, the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey, or JOLTS, showed Tuesday. Hiring edged up, while layoffs remained low. - The level of openings topped all estimates in a Bloomberg survey of economists. - The so-called quits rate, which measures voluntary job leavers as a share of total employment, held at 2.3%, matching the lowest since 2020. Fewer quits implies Americans are less confident in their ability to find another job in the current market. OUR TAKE In the current context of "higher rates for longer" fears, investors are probably over-reacting to this report which is adding some confusion to the current trend (which has been a progressive cooling down of the job market). Source chart: Bloomberg
A tweet by Robin Brooks: "Brazil's trade surplus remains in the stratosphere
There is no other EM that has transformed itself over the past decade in the way that Brazil has. The sharp rise in US interest rates is currently weighing on Real, but that's temporary. The massive trade surplus is permanent..."
Is China to blame for the rise in US long rates?
China has cut its holdings in US Treasuries to $822bn, lowest level since 2009. Beijing has been selling $300bn in Treasuries since 2021, & pace of Chinese selling has been faster in recent months, Apollos's Slok has calculated. Source: HolgerZ, Bloomberg
Incredibly, ultra long-duration Treasury bonds have now lost more in % terms than stocks did during Great Financial Crisis
The drawdown in extended duration Treasury ETF ( 58.3%) now exceeds PEAK-TO-TROUGH losses in S&P 500 during stock market crash of 2007 - 2009 (56.0%) Source: Jack Farley
Q4 has easily been the strongest quarter of the year with an average gain that is more than twice the average of Q1 and Q2
Source: Bespoke
Hedge funds have now built the largest short position in U.S. Treasuries in history
Source: DB, barchart
The new safety trade
-> An incredible $993 billion has gone into money market funds since the Fed started raising rates in March 2020. Inflows to money market funds are well ahead those seen in 2015, 2004, 1999 and 1994 rate hike cycles. Why take risk on your "safety" trade when you can make 5% risk-free? Source: The Kobeissi Letter
