August’s outsized US payroll gain is unlikely to be repeated in September. However, inflation—not job growth—remains the Federal Reserve’s primary concern.

The latest economist poll sees nonfarm payrolls rising by 90,000 in September, after August’s 162,000 increase and a net 55,000 of upward revisions to prior months. The unemployment rate is expected to remain at 4.1%, private payrolls are seen rising by 90,000, and average hourly earnings are forecast at 0.3% m/m and 3.1% y/y.

August’s gain was driven chiefly by hiring in food services and drinking places, as well as in local government education.

Barclays said uncertainty around its forecast remains elevated, with the available indicators and modelling approaches sending mixed signals.

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Global bonds came under heavy selling pressure again on Thursday, sending borrowing costs from the United States to France and Japan to multi-decade highs and underscoring mounting concerns for policymakers.

Bargain hunters stepped in during the late US morning, however, helping the market stabilize. The US benchmark yield retreated to around 5.26%, as Treasury yields across the curve declined. Still, analysts said there could be scope for further selling.

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Treasuries might look cheap against stocks, GDP and the global cycle, but on their own historical terms they have more to fall before they become oversold and ready for a durable bounce.

The counter-rally in Treasuries has yet to come, with 10-year yields as high as 5.34% so far failing to get buyers’ salivary glands going. That is surprising as Treasuries are starting to look good value from several perspectives. Yet holding off might turn out to be a wise move because, as we’ll see, an Occam’s razor approach shows that they could fall even more before they become oversold. Nonetheless, shorting is not a good idea when there is the looming prospect of government intervention.

(Continue Reading - Bloomberg)

President Donald Trump returned to office promising to lower the cost of living for Americans. At the start of his second term, the price of gasoline in the US was, on average, around $3 a gallon. It’s now above $4 — a record high for this time of year — posing a problem for Republicans as they seek to hold onto both chambers of Congress in November’s midterm elections.

Voters often punish the political party that’s in charge for the pain they feel at the pump. Adding to the GOP’s challenges is the surge in the retail price of diesel, which has breached $6 a gallon for the first time. While most US drivers don’t fill up their cars with diesel, the fuel is used in trucks, farm equipment, trains and construction gear. So, when diesel gets more expensive, the cost of many goods and services often goes up, too.

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