US Economy and Credit Markets Ended August 6, 2021
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Treasury bond yields increased last week. Longer dated maturities led the selloff in treasury bonds, resulting in the steepening of the yield curve. Much of the selloff in treasury bonds took place after Friday's better than expected jobs report. Nonfarm payrolls increased 943,000 in July, the largest increase in 11 months, and well above the consensus expected 870,000. The increase in July was led by the private sector, most notably an increase of 380,000 in leisure and hospitality payrolls. The unemployment rate dropped to 5.4%, down 0.5% from June. The blowout in the jobs report can be attributed to people returning to work as state governments pare back excess unemployment benefits. Last week a couple of Federal Reserve officials voiced their opinions on monetary policy and the economy's road to recovery. Dallas Federal Reserve President Robert Kaplan mentioned the central bank should start tapering sooner rather than later, while Federal Reserve Vice Chair Richard Clarida believes the domestic economy is on the right trajectory for the central bank to start raising interest rates by 2023. Major economic reports (related consensus forecasts, prior data) for the upcoming week include Tuesday: July NFIB Small Business Optimism (102.0, 102.5), 2Q Preliminary Nonfarm Productivity (3.4%, 5.4%); Wednesday: August 6 MBA Mortgage Applications (n/a, -1.7%), July CPI MoM (0.5%, 0.9%), July CPI YoY (5.3%, 5.4%), July Monthly Budget Statement (-$255.0b, -$174.2b); Thursday: July PPI Final Demand MoM (0.6%, 1.0%), July PPI Final Demand YoY (7.1%, 7.3%), August 7 Initial Jobless Claims (375k, 385k), July 31 Continuing Claims (2880k, 2930k); Friday: August Preliminary University of Michigan Sentiment (81.2, 81.2).
Posted on Monday, August 9, 2021 @ 8:19 AM

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.