Bonds bounce, tech rallies

Ailing markets around the world caught a break yesterday on a mix of signals, both decent and ebbing. The bond bounce and easing speculation on its antitrust win added to gains on Wednesday, with index futures up again ahead of Thursday's bell. The day ahead brings another stream of labor market updates ahead of Friday's critical August payrolls report.- Fed futures rallied to fully price a quarter point interest rate cut later this month after news of falling U.S. job openings added to a downbeat readout from the central bank's 'Beige Book' on economic conditions and relatively dovish soundings from Fed officials. Two-year Treasury yields hit a four-month low. The U.S. Senate Banking Committee will hold a hearing on Thursday to consider President Donald Trump's nominee to the Fed board, Stephen Miran, while central bankers around the world fretted about potential threats to Fed independence.- Long-dated government bond yields around the world pulled back from record or multi-year highs on Thursday in tandem with the 10 basis point slide in 30-year Treasuries from yesterday's 5% peak. Japan's 30-year equivalent also got a break after a bond sale there drew enough demand to calm the market. UK 30-year gilts rallied too, with a 20bp drop in yields from Wednesday's highs. The dollar was firmer.- Japan and the United States are in the final stages of talks to implement lower tariffs on Japanese automobile imports within 10-14 days after a U.S. presidential executive order. Japanese stocks rallied, but Chinese stocks sharply underperformed, falling the most in nearly five months after media reports of possible regulatory curbs on speculation.

Today's Market Minute- Donald Trump's administration asked the U.S. Supreme Court on Wednesday to swiftly hear a bid to preserve his sweeping tariffs pursued under a 1977 law meant for emergencies.- Alibaba (9988.HK), ByteDance, and other Chinese tech firms remain keen on Nvidia's (NVDA.O) artificial intelligence chips despite regulators in Beijing strongly discouraging such purchases, according to four sources.- North Korean leader Kim Jong Un said his country would "fully support" Russia's army as a "fraternal duty," and Russian President Vladimir Putin called the two countries' ties "special," state media KCNA reported on Thursday.- A notable trend this year has been the often-counterintuitive market reactions to U.S. President Donald Trump's efforts to upend many long-held economic norms. One of the biggest surprises has been the appreciation of China's yuan.- The high-stakes energy diplomacy in Beijing this week signals China’s willingness to defy U.S. President Donald Trump’s efforts to isolate Russia and assert U.S. energy dominance.

Chart of the Day 

U.S. job openings fell to a 10-month low in July, and there were more unemployed people than positions available for the first time since the COVID-19 pandemic. This data is consistent with easing labor market conditions. With reports on private sector payrolls and layoffs for August due on Thursday, Friday's August employment report is likely to be pivotal for Fed easing expectations.

Today's Events to Watch- U.S. Labor Data: August layoffs from Challenger (7:30 AM EDT), August ADP private sector payrolls (8:15 AM EDT), weekly jobless claims (8:30 AM EDT), and Q2 labor costs and productivity (8:30 AM EDT).- U.S. Trade & Services Data: July goods trade balance (8:30 AM EDT), August service sector surveys from S&P Global (9:45 AM EDT) and ISM (10:00 AM EDT).- Federal Reserve: The Senate Banking Committee holds a hearing on the nomination of Stephen Miran to the Federal Reserve Board (9:00 AM EDT). New York Fed President John Williams and Chicago Fed President Austan Goolsbee are both scheduled to speak. - International Diplomacy: German Chancellor Friedrich Merz, UK Prime Minister Keir Starmer, and NATO Secretary General Mark Rutte will take part in talks with Ukraine's President Volodymyr Zelenskiy in Paris.- U.S. Corporate Earnings: Broadcom, Copart, Lululemon.