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Global yields surge, economic data stronger than expectedđ
While most of China and HK were out on Lunar and Golden Week holidays the past week, the biggest news in macro was spike in global yields which saw 30yr treasuries yields touch 5%, 10y German bond yields touching 3%, and 10y JGB yields above 80bp.
This past week began with a line up of hawkish speakers for both the Fed and the ECB, emphasising along the lines of the last mile of inflation being the hardest to tackle, and the continued message that any expectations of policy easing to be premature; however, it was the release of stronger data that led to another mid-week 'taper-tantrum'-like spike in bond yields. Outside of a better than expected bounce in US ISM manufacturing, it was really the Wednesday bounce in JOLTS that shocked the markets into a risk-off move. Job openings bounced to 9,610k in August, significantly above forecasts of 8,815k, taking November hiking odds above 30% at one point, dragging 10y yields +12bp higher on Tuesday and the SPX -1.3% lower on the day.
