The Weekly Report

  • A busy week concludes with the first sell-off of note since June 10. Of course, the base this week is far lower. The net development for the week is rates are trying to find a stable plateau with one week remaining in the month. May’s rapid descent was unsustainable, but there hasn’t been any challenge to near-term support at 2.125% on 10-yr UST. Volume is finally falling off as the weekend approaches.
  • Among risk asset classes, emerging market equities are the stars of the week with a gain of 4.7%. For all the talk of the declining dollar, it is down only 1.3%. FTN’s models suggest it actually remains undervalued against fundamentals, despite the commentary that says its glory days are numbered.
  • After the Fed’s pivot the hard work of fundamental, macro analysis – and the interplay with central bank policy – becomes the new key for fixed income strategy. The first article suggests two big steps to pursue an outline for tasks ahead. It tackles half the list as a good start to prep for the third quarter.
  • Market Update provides a high level review of the week’s fixed income trends and an in-depth look at the major upcoming data releases that will spur volatility next week and through the first three in July. All are tied to the new Fed thinking unveiled this week.
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