Originally posted at Capitalstool.
Here’s the 10 year Treasury yield on a continuous hourly 24 hour basis. If it drops under 2.975 then another pullback to around 2.90 would be likely. But whether it holds here, or drops back, it’s likely to be headed higher after that.
I don’t think that the Bureau of Liar Statistics Nonfarm Payrolls report will reflect the massive strength in June withholding tax collections. Most of the gain in taxes came after the jobs survey date of the 12th of the month.
In addition, the first release of the jobs report is always a crapshoot, due to the statistical massagery that the BLS applies. That includes the ridiculous seasonal adjustment that is based on 5 years of past data and a guess at 5 years of future data that doesn’t exist yet. Then there’s the absurd business birth/death adjustment, that’s another made up bunch of crap. In truth, the BLS has no clue how many jobs were created.
After the first release they fit and refit the current data 7 times over 5 years before finalizing it. Eventually, their graph fits reality. But the current release is simply random junk for market masturbation.
But the truth is that job creation for June as a whole was very strong. Tax collections don’t lie. And this will show up in later reports as the BLS gradually retrofits the data to reality. The bond market is headed for another unpleasant surprise in the months ahead.
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