Market Flux Event
30-Year Treasury Yield Nears 5.29% as Manufacturing Data and Labor Figures Point to Mixed Economy
The 30-year Treasury yield surged as high as 5.286% on September 1, its strongest level since August 18, nearly erasing the decline that followed Treasury Secretary Scott Bessent's bond-market intervention last month. The yield later pulled back just under 5.26%, but the rapid reversal raised questions about the durability of any official effort to calm long-end rates, with markets signaling that inflation, debt supply and fiscal risk remain the dominant forces. Yields at these levels keep bond prices weak and push mortgage rates, corporate borrowing costs and government financing expenses higher.
US factory activity expanded for a 22nd consecutive month in August but came in softer than expected. The ISM Manufacturing PMI fell to 54.6, missing the 55.2 forecast and easing from July's 55.6, which had been the highest reading since May 2022. Within the report, new orders dropped to 53.7 from 56.7, employment slipped to 51.2 against a 53.0 estimate, and prices paid held elevated at 71.1, above the 70.5 consensus and unchanged from July, underscoring that input cost pressures remain sticky even as growth cools.
The S&P Global final manufacturing PMI for August came in at 53.9, beating the 53.2 estimate and matching the prior month's reading. Firms cited more price hikes and material shortages, while hiring was the strongest so far this year. Year-ahead output expectations rose to a three-month high, with businesses citing hopes for an end to ongoing conflict and a smoother domestic policy environment.
Labor market data added to the picture of gradual cooling. July JOLTS job openings fell to 7.271 million, below the 7.313 million forecast and down from a revised 7.359 million in June, suggesting employers are growing more cautious. Despite the softer readings, CME FedWatch data showed markets pricing roughly a 70% chance of a 25 basis point rate hike at the September 15-16 FOMC meeting, as elevated oil prices continue to keep inflation and rate-hike fears alive.
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Sources
- FirstSquawkU.S S&P GLOBAL MANUFACTURING PMI (AUG) ACTUAL: 53.9 VS 53.9 PREVIOUS; EST 53.2
- Seeking AlphaU.S. August PMI Manufacturing revised higher in final August print
- AshCryptoBREAKING: US ISM PMI CAME IN AT 54.6 EXPECTED: 55.2
- MikeZaccardi54.6 ISM Mfg PMI for August... a little light Prices Paid steady and high at 71.1 Weaker New Orders and Employment
- FaststocknewssISM MANUFACTURING PMI 54.6 IN AUGUST, MISSES CONSENSUS - Manufacturing PMI: 54.6 vs 55.2 est, miss, from 55.6 in July - Prices paid: 71.1 vs 70.5 est, above consensus, unchanged from July - Employment: 51.2 vs 53.0 est, miss, from 52.8 - New orders: 53.7, from 56.7 - Supplier deliveries: 59.3, from 58.9, with readings above 50 indicating slower deliveries Growth slowing, input prices stuck. July's 55.6 was the highest reading since May 2022. Markets are pricing a roughly 70% chance of a 25bp hike at the September 15-16 FOMC meeting, per CME FedWatch.
- MarketRebelsUS Aug. Manufacturing PMI 53.9 vs Flash Reading 53.2
- NaeemAslam23US JOB OPENINGS FALL TO 7.27M AS LABOR DEMAND COOLS AHEAD OF FRIDAY’S PAYROLLS July JOLTS job openings slipped to 7.271M, below the 7.313M forecast and down from June’s revised 7.359M. The miss adds to evidence that employers are becoming more cautious after recent weakness in hiring. The tension is timing: softer labor demand normally argues for easier Fed policy, but higher oil prices are simultaneously keeping inflation and rate-hike fears alive. Long-duration Treasuries are the direct trade. Further labor cooling lowers growth pressure and gives bond yields room to retreat.
- MarketsdayUS PMI S&P Global Manufacturing PMI Final (Aug): 53.9 vs 53.2 est, prior 53.9. Beat the print. Didn’t beat last month. Still in expansion. Stock-building carried output and demand through Q2 into August Output and new orders both slowed in August Firms cited more price hikes and material shortages Year-ahead output expectations rose to a 3-month high Hopes the war ends and domestic policy stays smoother Hiring was the strongest of the year so far