Halister News

(Bloomberg) -- While outcome of FOMC’s Sept. mtg won’t be based on Aug. payrolls alone, “decision is close enough to binary” in bond mkt’s opinion for rates to move that way on Fri., FTN strategist Jim Vogel writes.

• If Aug. payrolls are below 170k, “there will be enough doubt about the Fed’s timetable that yields will ease back to wait for more information”
• Should number be above 170k, Fed “stays in play and bond prices remain on guard”
• “Most likely” outcome is payrolls figure of 175k-225k and unemployment rate of 4.8%-4.9%, 5s between 1.16%-1.22% and 10s between 1.57%-1.62%
• Mkt has spent a mo. gearing up for more aggressive Fed; will take “a lot of convincing” from Aug. data for traders to back away from impression of strong economic growth created by June/July reports