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Why It’s Premature To Postpone Tapering After US Payrolls Disappoint
Clearly it’s disappointing that 235k jobs were gained in August that fell below everyone’s expectations and that was only partly offset by positive revisions of 134k and with poor breadth. Markets were nevertheless mixed in their reaction as the USD slightly depreciated, the Treasury curve steepened by quite a bit because the 10 year yield increased by 3bps and the US S&P500 is little changed so far on the day. I don't, however, think that one payrolls print derails taper plans for this year and with a December announcement remaining our call. This is more downside risk than had been anticipated, but I ... (full story)