Global equities, crude oil, and U.S. rates opening higher across the curve this morning after positive reports that the U.S. is talking with China. The 10-year U.S. Treasury is currently trading +6.6bps to 1.609% and the 2-year/10-year spreads back into positive territory at nearly 10bps.
After last week’s volatile markets that saw 10-year swap rates whipsaw +/-10bps daily to a low of 1.414% before closing out the week higher at 1.447%, investors will be looking for firm guidance from Fed Chairman Powell at this week’s annual Jackson Hole gathering. The big question in mind is whether the Fed will be willing to further cut interest rates as July’s 25bps rate cut was just a “mid-cycle adjustment in policy” – though the June “dot plots” or Fed interest rate projections showed rate hikes rather than cuts.
Up ahead this week, we look forward to the FOMC July minutes which will be released on Wednesday and provide insight behind the scenes that led to the first interest rate cut in a decade. On Thursday, the Kansas City Federal Reserve Bank will host its annual central banking symposium in Jackson Hole, Wyoming where global central bankers will discuss this year’s theme – Challenges for Monetary Policy.
On the data front we have the following notable U.S. reports:
