Continuing on two weeks of gains, CME 5- and 10-year treasury note futures traded slightly higher as investors awaited the US Nonfarm payrolls (NFP) data that could further signal the US Federal Reserve’s interest rate intentions.

Even prior to the NFP data, investors expected the US central bank to cut interest rates by 25 bps at its September meeting, according to the CME FedWatch, a highly viewed gauge of the public lender’s interest rate expectations. That said, this outcome seems already priced into the market, suggesting more bullish news could be needed for the rally to continue. (LiveSquawk – Continue Reading)

White House economic advisor Kevin Hassett called Friday’s new jobs report number “a little bit disappointing,” but added, “I expect it’s going to revise up.”

Hassett’s comments on CNBC’s “Squawk on the Street” came shortly after the Bureau of Labor Statistics reported that nonfarm payrolls rose by only 22,000 in August.

That is less than one-third of the 75,000 new jobs expected by economists who were surveyed by Dow Jones ahead of the report. (CNBC – Continue Reading)

The Federal Reserve may implement as many as three rate cuts in 2025 as labor growth slows and political pressure mounts, according to the chief strategist of Europe’s largest asset manager.

“A slower growth pace of the US job market would support the case for two interest rate cuts by the Fed this year, while political pressure would allow for a third one,” Monica Defend, who heads strategy for Amundi SA, said in an interview. (Bloomberg – Continue Reading)

OPEC+ leader Saudi Arabia wants the group to consider reviving more oil production ahead of its scheduled return at the end of next year amid a push to reclaim market share, people familiar with the matter said.

Key alliance members will hold a video conference on Sunday that will consider what to do with a 1.66 million barrels a day tranche of halted supplies, having just fast-tracked the return of a previous layer over the past five months. Brent oil futures fell as much as 2.4%. (Bloomberg – Continue Reading)

As we saw during the Covid pandemic, lab-created experiments can wreak havoc when they escape their confines. Once released, they can’t easily be put back. The “extraordinary” monetary-policy tools unleashed after the 2008 financial crisis have similarly transformed the Federal Reserve’s policy regime, with unpredictable consequences.

The Fed’s new operating model is effectively a gain-of-function monetary policy experiment. Overuse of nonstandard policies, mission creep and institutional bloat threaten the central bank’s independence. The Fed must change course. Its standard tool kit has become too complex to manage, with uncertain theoretical underpinnings. Simple and measurable tools, aimed at a narrow mandate, are the clearest way to deliver better outcomes and safeguard central-bank independence over time. (WSJ – Continue Reading)

Japan will raise its minimum hourly wage by a record 6.3% to ¥1,121 ($7.56), reinforcing the nation’s wage-price cycle and supporting the case for the Bank of Japan to keep hiking rates.

Prefectures nationwide will boost minimum pay by an average of ¥66 an hour in the current fiscal year, the labor ministry said Friday. The increase marked the largest since records began in 1978. The new wage level, which applies to about three million workers, will gradually take effect from October. (Bloomberg – Continue Reading)