BLS revision to -911k jobs not enough to sustain hopes for 50
September 10, 2025
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–Is ANYONE working? Benchmark revision from the BLS shows 911k fewer jobs than originally reported. Perhaps that was better than expected as yields ROSE on the day, led by shorter maturities. 2y note up 4.9 bs to 3.542% while tens +2.6 to 4.072% in front of today’s auction. Thirties tomorrow. On the SOFR strip SFRM6 weakest, -7 at 9683.0. Red pack settled -5 at 9707.625 while golds were -1 at 9659.875. 2/10 at 53 bps is now near the lower end of the last month’s range (high 61.7). I suppose there’s an incentive to get the bad news (lower job revisions) out of the way and build off a lower base, though the economic foundation seems a bit shakier.
–Significant exits of bets for aggressive ease, even aside from curve trades. With Sept SOFR options expiring Friday and SFRU5 not able to settle above 9600, U5 calls shed 77k lots (9597.25s). TUV5 104.75c, 26k sold on exit at 2.5 ref 104-125…bought last week 3.5 to 4.0. TUZ5 104-131s. However, at a price of 9595, FFV5 still prices a small chance of 50.
–Poland asks to invoke Article 4 of NATO treaty after Russian (or Belarus) drones violated its airspace, several of which were shot down. (Newsweek) “Unlike Article 5’s collective defense element, NATO’s Article 4 does not trigger military action, but initiates a formal alliance discussion when one member considers its territorial integrity or security is threatened.” Discuss
–News today apart from geopolitical escalation: PPI expected +0.3. YOY expected 3.3 from 3.3, ex-food and energy 3.5 from 3.7. CPI tomorrow. SFRU6 settled 9700. Midcurve straddle expiring Friday settled 9.0, probably about right. Last week’s high 9710.5, and low was 9685.5.
–Attached chart is US Bankrate 30y mortgage vs US 10y yield, now at a spread of around 250 bps, which is still rather high, even though the mortgage rate has moved to the low of this calendar year at 6.55%.
Ed Sheeran moving his family from the UK to the US (partially due to touring). UK gets Rosie O’Donnell and Ellen DeGeneres. US gets Sheeran. Winning.
