PMI超预期致美债收益率飙升，市场定价加息预期

So what on earth do you make if the bond market moves at the past 24 hours? Taking a deep breath and bracing for more, perhaps. Uh, I couldn't believe the price action yesterday. You know about this time yesterday. Yields were slightly softer on the day. Just a massive reversal. And I tell you what, if you had told me yesterday that the big catalyst to supercharge it was going to be PMI data. I would have laughed at you.

I'm sorry. It wasn't on anyone's bingo card as being the major catalyst. But those PMIs, we're just so incredibly strong. And they kind of ended the any debate. That monetary policy in the US is still way too loose. The economy is hot. We already have an underlying inflation problem and the monetary policy is loose. Financial conditions are easy and therefore it immediately priced in, uh, a higher likelihood of back to back rate hikes this year.

I think October is almost going to be a sure thing when it comes to the data next week, if that will be the the kind of confirmation signal. So we've got an October hike and people expect another one then December. So bonds are suffering from strong economy, hot inflation. And then we got the jump up in energy prices. Crude was already pressured. The price action on treasuries was actually a little bit disappointing already when when oil was falling and then oil bounced back up and made them more vulnerable.

And then we got the PMI data, and then we got this ridiculous proposal of a diesel export ban. It was just basically a whole combination of factors that really hit the bond market hard. And most of those things are coming out of Washington, are coming out of the administration's policies. Mark, what's the chart? I heard Friday that a number of funds got into trouble on the big O eight move. This was an epic move, and it was across a number of different markets.

A fund's getting into trouble. It's a very crowded market out there that they they definitely must be. I have not yet heard who is getting hurt right now. I wouldn't say the names on live TV even if I had, um, but you know, we know that a couple of weeks ago, the front end move in bunds and gilts kind of stopped out. Quite a few big names already. Uh, and I'm sure we're going to find out in the coming days that there was a, you know, a little bit more damage yesterday.

It is certainly change those PMIs change the narrative again here. And they've put Treasurys back in the back foot. Long term institutional yield income collectors are kind of slowly nibbling into an end to the sell off of long and treasuries. Which is why the curve will continue to flatten. But overall it's put treasuries on the back foot again and the prospect for stocks then in that environment, Mark. You know what.

Ultimately stocks will be fine. This is remember this is a yields higher because the economy is so hot because growth is so good short term. Look we know about the September seasonality. We've been talking this week about the structural stories. Very good for stocks. But this is a September seasonality. What's going to be the negative catalyst. We didn't see it there. I think there's a chance that you know, with this slightly higher energy prices, with the disappointment around the negotiations between U.S. and Iran, there's still a chance for a bit more weakness into next week.

I do think October will then likely be a very good month for stocks despite higher yields. They're more of a speed bump that caused volatility, but strong earnings will bring the stock market higher ultimately.