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Bond Market Watch: Key Trends and What's Ahead This Week


Global Bond Market Trends


The bond market is taking a hit worldwide, with bond prices falling and yields rising. This trend is noticeable in countries like the US, UK, Germany, France, Switzerland, and Australia. Right now, US ten-year Treasury bonds and mortgage-backed securities are at crucial technical points.


Changes at the Federal Reserve


Beth Hammock is set to replace Loretta Mester at the Cleveland Fed in August, and her first vote will be in September. Hammock brings valuable experience from Goldman Sachs. In the meantime, Austin Goolsbee from Chicago, known for his dovish stance, will take the Cleveland vote on July 31. There's speculation about a potential rate cut in September, depending on upcoming economic data.


Important Economic Data This Week


This week is full of significant economic reports that could impact the bond market:


- JOLTS Job Openings (Tuesday, 10:00 AM ET):** Expected to show a decline in job openings to 7.9 million, with a steady quits rate of 2.2%.

- ADP Employment Report (Wednesday, 8:15 AM ET):** Forecasted to show 156,000 new jobs in June.


- Initial Jobless Claims (Wednesday):** This report, usually released on Thursday, has been showing higher numbers due to recent layoffs.


- BLS Jobs Report (Friday):** Expected to report 195,000 new jobs and an unemployment rate of 4%.



What to Watch For


Expect significant market movements this week due to these key data releases and Fed updates:


- Jerome Powell’s Speech (Tuesday, 9:30 AM ET):** Watch for insights on future monetary policy.

- Fed Minutes Release (Wednesday, 2:00 PM ET):** These minutes from the June meeting could reveal important details about the Fed’s thinking. Note that the market will close early that day.


With so much critical news on the horizon, the bond market is likely to be volatile. Mortgage bonds and ten-year Treasuries are at key support and resistance levels, respectively. This week’s data will play a significant role in determining the market's direction.


Stay tuned for an eventful week in the bond market, shaped by global trends and crucial economic reports. Be prepared for potential volatility as new data is released and the Federal Reserve makes important announcements.

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