Market Updates

• Yield on the two-year Treasury note increased by four basis points during the week to a yield of 1.55%. The ten-year note climbed seven basis points to a yield of 1.57% undoing the recent inversion between the two maturities. The inversion of the three-month Treasury bill and the ten-year Treasury note remains, but narrowed from -50 basis points to -34 basis points.

• Equities made modest gains during the week as new trade hopes rose on the news that the U.S. and China will resume trade talks in October, giving investors hope that a solution towards a trade resolution is proceeding.

• Non-farm payrolls came in weaker than expected. Total payrolls increased by 130 thousand, which was below the expectation of an increase of 165 thousand jobs. Non-farm payroll growth has now decelerated through the first eight months of 2019 to 153 thousand from 223 thousand in 2018.

• The Fed is scheduled to meet September 18th and markets are fully pricing in another rate cut. Odds of another 25 basis point cut are significantly greater at 94% compared to a 50 point cut at only 6% probability.