PremiumInside The Jobs Rollercoaster: How August's Seasonal "Gift" Came Due In September, And Squeezed The Bond Shorts
Late on Thursday night we published our September jobs preview, under the not-so-subtle title "Beware A Bond Squeeze As August Seasonals Reverse." The thesis was simple: August's blockbuster 162K print had been inflated by an unusually generous seasonal adjustment, that generosity would have to be paid back in September, and with CTAs sitting on a near-record short in Treasuries, a weak print could set off a squeeze. Our "too cold" scenario was spelled out plainly:
"Too cold: a sub-20K print or 4.2%+ unemployment means August was a seasonal mirage. Hikes get priced out, and the CTA bond short gets squeezed."