Comment At face value, Friday’s NFP was mana from heaven for the FOMC doves, who want to delay tapering and policy normalisation. As such, it should have been a classic example of Bad = Good, i.e., poor economic data being bullish for risk assets. Yet, perversely, the dollar is up today, commodities are weaker, and equities are nonplussed. That suggests something else is at play, and if we look around, the move in Treasuries has piqued our attention. The jump in yields makes sense at face value, as weak employment growth should allow Powell to keep running it hot and remain behind the curve. However, since the spring, bond yields have fallen steadily and have been utterly impervious to strong and weak data. So why do they suddenly care about one weak NFP, or is something else driving fixed income and if so, what are the implications?
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