Moment of Truth
[2017-10-31 02:19 GMT]
The full slate of events ahead and the prospect of market turmoil could scare away traders until the dust settles.
The next four trading days will bring a torrent of market-moving information: President Donald Trump is poised to finally announce his nominee to lead the Federal Reserve; U.S. central bankers have an interest-rate decision to make; and the Treasury will unveil plans to issue more debt to make up for lost funding from the Fed. Oh, and investors will also get the latest reading on the nation’s job market and the central bank’s preferred inflation gauge.
It’s a lot to digest. What’s more, it all comes at a pivotal time, with 10-year yields breaking above the crucial 2.4 percent level and touching a seven-month high of 2.48 percent. With yields entering a new, elevated range, traders are bracing for turbulence as they ponder the direction of the world’s biggest bond market for the remainder of 2017. The weekly close indicates bulls in full control and there is no plan in giving up on long posts yet, not until 2.6% yields, targeting 2.8%
It’s a critical week of economic data, with releases on inflation and the labor market
Oct. 31: Employment cost index, S&P CoreLogic Case-Shiller indexes, MNI Chicago Business Barometer, consumer confidence
Nov. 1: ADP employment change, construction spending, Markit U.S. manufacturing PMI, ISM manufacturing, prices paid, new orders and employment
Nov. 2: Challenger job cuts, initial jobless claims, continuing claims, nonfarm productivity, unit labor costs, Bloomberg consumer confidence
Nov. 3: Change in nonfarm payrolls, unemployment rate, average hourly earnings, labor-force participation rate, trade balance, factory orders, durable goods orders, Markit U.S. services and composite PMIs
The FOMC is expected to leave rates unchanged Nov. 1 and set up a hike in December