Higher Rate Playbook

What’s in Today’s Report:

  • Higher Rate Playbook Revisited
  • Was Yesterday a Reversal?

Futures are flat following a generally quiet night as markets look ahead to this morning’s jobs report.

Economic data and earnings overnight were solid as Samsung posted good numbers while German Manufacturers’ Orders handily beat expectations (2.0% vs. (E) 0.2%).

There was no notable trade news or European political news (Italy) out overnight.

Today the focus will be on the jobs report, and expectations are – Jobs: 180k, Unemployment: 3.8%, Wages: 0.3% m/m, 2.9% y/y.

The key is the wage number, and if it prints a 3.0% yoy gain, look for Treasuries and the dollar to rally.  A rally in the dollar to the mid 96 level and the 10 year yield moving into the mid to high 3.20% range will likely pressure stocks again.

Outside of the jobs report, there are two Fed speakers, Kaplan (12:30 p.m. ET) and Bostic (12:30 p.m. ET) but neither should move markets.

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