U.S. Initial Jobless Claims Preview U.S. Initial Jobless Claims Preview: Claims for the week of November 14th are out Thursday and should reveal a headline improvement to 267k (median 270k) after holding at 276k for the prior two weeks. The holiday season is typically a volatile time for claims and analysts expect November to set a slightly higher average of 266k for the month from 263k in October and 269k in September.
Treasury Action: yields were whipsawed by the FOMC minutes Treasury Action: yields were whipsawed by the FOMC minutes, which not only said that a December rate hike could well be warranted but also left policy options open after mulling diminished downside risks from "global economic and financial developments." The 2-year yield surged over 0.905% on the headlines before retreating below 0.88% on a deeper read that reflected some equivocation and debate. The T-note yield popped over 2.29% only to ease back to 2.27%. The 2s-10s spread settled inside +140 bp for a 1 bp compression on the day. The 5s-3s spread collapsed to +136 bp led by weakness on 5s and relative strength on the bond.
FOMC minutes most participants thought liftoff conditions could be met FOMC minutes most participants thought liftoff conditions could be met by December, and hence wanted the statement to show a December hike could be appropriate. Indeed, that was the message read by the markets. Most officials also thought global risks had diminished. Officials also mostly agreed that the process of removing accommodation would be gradual. This is all consistent with subsequent Fedspeak since the October 27, 28 meeting. But there was nothing definitive in the minutes that the FOMC will pull the trigger in 5 weeks time.