Safe haven flows muted so far
October 9, 2023
–Huge bounce off the lows in rate futures Friday, following larger than expected NFP of 336k (though Household survey was only +86k). This weekend’s attack on Israel and inevitable response caused flight to quality buying in treasuries, but does not appear to have changed the trend towards higher rates, at least for now. Inflationary aspects of expanding war, from oil to other supply shocks, and from increased US gov’t spending on weaponry will likely cap any rally in the long end. However, gold had an outside day at new lows and closed higher Friday. Only up about $20/oz this morning, but could easily benefit further from safe haven flows.
–This week brings inflation data and 3,10, 30y auctions. Dallas Fed’s Lorie Logan speaks on the economy at 9 this morning, Governor Jefferson at 1:30 (with Q&A).
