U.S. government bond prices moved lower for the second consecutive session on Thursday, following a contractionary economic print as ISM manufacturing fell below the 50.0 threshold for the first time since September 2009. This comes amidst a seventh consecutive month of contraction for Germany and only further reaffirms the current manufacturing recession in the Eurozone’s largest economy. This recent data print is coupled with a preliminary report that the economy added over 500k less jobs between 2018 and 2019, which would be the largest revision since 2009. This confirmation of a deceleration of domestic and global growth was only reaffirmed by a brief inversion of the 2-year/10-year treasury spread, with outlook concentrated on Fed Chairman Powell’s speech at the Jackson Hole symposium on Friday. While Powell is expected to preface with an update on the continued risks to trade and growth, the focus will be on expectations of further adjustments by the Fed in September. As growth continues to decelerate look for yields to continue to trend sideways to lower with the current range on the benchmark ten-year yield seen between 1.47 – 1.74. 

U.S. 10-Year Yield Sep ’19 Daily Chart
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Alexander Turro

Senior Market Strategist
Alex began his career with an IB at the Chicago Board of Trade after graduating with a BA/BS from Indiana University. He then went on to work for a proprietary trading software company before joining RJO Futures as a Market Strategist.
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