Expect high volatility this week with both inflation and labor data

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Published Date 10/28/2024

In global news, Israel made its move on Iran this weekend attacking military installations, as it had promised no oil installations or attacks on Iran nuclear programs. The result this morning sent oil prices down $4.50 at 9 am ET, down 6.50%.

Friday’s October employment report expected to be much lower job increases after the shocking growth in jobs reported in September.

At 9:30 am the DJIA opened +222, NASDAQ +123, S&P +27. 10 year at 9:30 am 4.24% unchanged. FNMA 6.0 30 year coupon at 9:30 am +4 bps from Friday’s close and -9 bp from 9:30 am Friday; the 5.5 coupon at 9:30 am +1 bp from Friday’s close and -24 bp from 9:30 am Friday.

11:30 am $69B 2 year note auction.

1 pm $70B 5 year note auction.

One weight removed from markets, Israel refrained from going at Iran’s oil as it said it would not do. A month ago, the releases of September employment data began the steady increase in rates, comments from key Fed officials that the Fed may pause its rate cuts fueled additional selling. Finally, capping off the sour outlook influential Jamie Dimon, JP Morgan/Chase saying WW III as already begun added more angst in the rate world. Last week the DJIA lost 1200 points, though this morning opened better.

Treasury will step up and borrow another $183B in 2s, 5s, and 7s beginning this morning. The amount is the same as last month’s 2s, 5s and 7s. Inflation data on Thursday and employment on Friday.

This Week’s Economic Calendar:

Monday,

11:30 am $69B 2 year note auction

1 pm $70B 5 year note auction

Tuesday,

9 am August Case/Shiller home price index (year/year +5.2% down from 5.9% in July)

10 am October consumer confidence index (99.1 from 98.7)

September JOLTS job openings (7.9 million from 8.04 million in August)

1 pm $44B 7 year note auction

Wednesday,

7 am weekly MBA mortgage applications

8:15 am October ADP private jobs (115K from 143K in September)

8:30 am Q3 advance GDP (+3.0%)

10 am September pending home sales (+1.0% from +0.6% in August)

Thursday,

8:30 am weekly jobless claims (+235K from 227K)

September personal income and spending (income +0.4%, pending +0.4%)

September PCE (month/month +0.2% from +0.1%, year/year +2.15 from +2.2%; core PCE month/month +0.3% from +0.3%, year/year +2.65 from 2.7%)

Q3 employment cost index (+1.0%, year/year +4.1%)

9:45 am October Chicago purchasing managers index (47.3 from 46.6)

Friday,

8:30 am September employment data (unemployment 4.1% unch, NFP jobs +125k from 254K, private jobs +90K from 223K; average hourly earnings +0.3% from +0.4%, year/year +4.0% unch)

10 am October ISM manufacturing index (47.6 from 47.2)

September construction spending (+0.1% from -0.1%)

Source: TBWS

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