The Atlanta Fed will release an update to its GDPNow forecast shortly and I expect it to rise above 5% from the current 4.9% reading. What's more is that a high number is getting increasingly easy to believe.
Today the US reported a $58.3B trade deficit compared to $62.3B expected. That's the lowest deficit since the pandemic and a number that will feed directly into Q3 GDP.
In response to the data, US Treasury yields rose once again with the 10-year climbing 3.6 bps to 4.77% from 4.71% before the data.
The selloff in bonds was compounded by weekly initial jobless claims at 207K compared to 210K expected. The stubborn low number in claims is a pushback against yesterday's softness in ADP data.
With yields rising the US dollar is also climbing and gold has hit new lows. So far, the moves in FX are smaller than in bonds, which might reflect an overshoot in a fixed-income market that's off balance.
