TL;DR
Long the December hike, 94% priced on the last settle, and a 29k payroll miss is its first real test.
Closing my 2s10s tell, the curve steepened to 41bp through my 32 invalidation.
Rate vol is the live tail, MOVE at 108 in its stressed band while VIX sits calm at 16.
HY is the crack to watch, +44bp on the week while IG stays anchored; invalidation 90bp.
Copper longs are stretched at the 96th percentile, a crowding flag I'm still carrying.
Where We Stand
Yesterday I stood long the hike story, December near certain and no cut anywhere on the strip, and I said softer PCE hadn't dented it. December was 94% priced on the last settle. Payrolls then came in at 29k against 90k expected, with the unemployment rate ticking to 4.2% and hourly earnings soft at 0.1%. The hike thesis opened on 29 September still stands, but this is the print that tests it, and the next settle on the strip tells me whether it holds.
My 2s10s tell is dead, though. I'm changing my read on the three-plus-hikes-stretched thesis because the curve has steepened to 41bp, well through the 32 invalidation I set four days ago. I'm closing it. The copper crowding flag is still live, and credit stays my anchor with IG mid-range.
