US initial jobless claims 249K vs 236K estimate

• Prior week 235K
• initial jobless claims 249K versus 236K estimate. Highest level since last year this time
• 4-week moving average of initial jobless claims 238K vs 235.50K last week.
• Continuing claims 1.877M versus 1.856M estimate.
• Prior week continuing jobless claims 1.851M revised to 1.844M
• 4-week moving average of continuing claims 1.857M vs 1.852M last week

WIth both the initial and continuing claims moving to the upside, it is showing job weakness. The Fed met yesterday and kept rates unchanged. However, they did open the door for a cut in September. The Fed also shifted the balance of risk to include employment and not just on inflation.

Between now and the next meeting in September, there will be a number of data points including the US jobs report tomorrow and in September. There will also be a number of inflation numbers. This move higher is certainly helping the rate cut in September storyline. The market is already pricing in a 100% chance of a cut at that time.

For the market, the question is “Is bad news, bad news for good news”.

Dow is up 90 points after the data. The S&P is up 27 points, and the Nasdaq is up 99.32 points.

Yields are lower:

• 2 year yield 4.249%, -8.9 basis points
• 10 year yield 4.027%, -7.6 basis points
• 30-year yield 4.307%, -6.1 basis points

This article was written by Greg Michalowski at www.forexlive.com.