U.S. economic data bucked the trend and turned positive, U.S. debt experienced a rare bearish dip🤔
Yesterday, the market unexpectedly experienced large fluctuations. The U.S. economic data was once again strong across the board. The number of people applying for unemployment benefits for the first time and those continuing to apply for unemployment benefits were unexpectedly lower than expected, at 221,000 and 1.69 million respectively. Durable goods orders increased by 4.7% month-on-month. vs. expected 1.3% strength, but core PCE weakened, growing 3.8% month-on-month, lower than expected 4.0%. Real GDP growth in the second quarter was 2.4% quarter-on-quarter, 1.8% higher than expected, in line with the Atlanta Fed's GDPNow forecast, with domestic sales +2.3%, consumption growth +1.6%, and corporate fixed investment +7.7% showing surprisingly strong performance. The unusually strong U.S. economic data led to a rare bearish steep trend in U.S. bonds. The market responded by following the FED's "data-dependent" path. The 2/10s curve steepened by 5bp, and the 10-year yield closed up 13bp.
