The US cash Treasury tape opens Tuesday August 4 at 8:00 ET into the June JOLTS release at 10:00 ET and June factory orders at 10:00 ET, first data prints after Monday’s July ISM manufacturing PMI at 55.6 blew the 49.0 to 51.0 band the strip carried into the release and put the December 10 second cut back on the table for reprice. Monday’s 10:00 ET print landed 5.8 points above the June 49.8 headline, the largest single-month move since May 2022 and the highest headline read since May 2022. The production sub-index at 58.5 (from June’s 51.4) and the employment sub-index at 52.8 (from June’s 44.2) carried the surprise: employment printed the first expansion read since May 2024, breaking a fourteen-month contraction streak. Fed-funds futures walked the December 10 second cut probability from 72 percent Friday to 58 percent Monday close, first close under 65 percent for the December contract since June 27. The 10 ET JOLTS print and the 10 ET factory orders print set the position the strip carries into Wednesday’s July ADP and July ISM services and Friday’s July nonfarm payrolls at 8:30 ET.

Monday’s ISM print and the reprice through Monday’s cash close

The July manufacturing PMI at 55.6 landed inside the plus 55 to plus 56 tail the pre-print options market had priced at 4 percent probability. The consensus print sat at 49.5 and the highest sell-side call inside the survey window was 52.0. The new orders sub-index at 55.4 printed 5.3 points above June and the highest print since March 2022. The backlogs sub-index at 51.9 printed the first expansion read in twenty-four months. The prices paid sub-index at 71.1, down 0.9 from June’s 72.0 but 11.1 points above the pre-print consensus band midpoint of 60, held the tariff pass-through the desk has been carrying through the goods-CPI channel since March.

The 10-year closed Monday at 4.06 percent implied cash-equivalent yield, nine basis points wider on the session and the largest single-session widening since April 3. The 2s10s finished 65 basis points, seven basis points flatter on the session and back inside the pre-July-30 statement range. The DXY closed 100.3, up 0.5 on the day. The December 2027 SR3 contract implied a terminal rate of 3.18 percent, seven basis points higher on the session and off the twelve-month low the Friday close carried. The September 17 cut stayed priced at 99 percent: the ISM surprise did not repossess the near-term cut path, it repriced the cadence past September.

The overnight band the ten-year has to hold

Sunday-into-Monday Globex carried the ten-year futures in an implied cash-equivalent yield band of 4.04 to 4.09 percent through Monday’s post-close tape, tighter than the intraday 3.97 to 4.08 percent range Monday cash printed. A break of the 4.02 percent floor through the 10:00 JOLTS print reads as fade at Monday’s ISM reprice and pulls the December second cut probability back inside the 65 percent line, consistent with the two-cut year the strip carried through the July 30 statement. A break of the 4.11 percent ceiling confirms Monday’s ISM reprice as directional through the July NFP tape, walks the December second cut past the 50 percent threshold into a single-cut year, and pulls a December 2027 SR3 implied terminal above 3.25 percent for the first time since May 22.

June JOLTS at 10 ET

The BLS publishes the June Job Openings and Labor Turnover Survey at 10:00 ET. The May JOLTS printed job openings at 7.19 million, the quit rate at 2.0 percent, and the vacancy-to-unemployed ratio at 1.05, the tightest ratio print inside the twelve-month range and the softest labor-side tightness since May 2021 outside pandemic distortion. The hires rate at 3.4 percent and the layoffs rate at 1.1 percent held twelve-month range midpoints.

The line the strip reads on the June JOLTS print is the job openings number against the 7.00 to 7.20 million band and the quit rate against the 1.9 to 2.1 percent band. A June job openings print inside 7.05 to 7.15 million with a quit rate holding at 2.0 percent confirms the labor-side softening the June NFP payrolls print at 139 thousand flagged and does not carry directional weight against Monday’s ISM manufacturing reprice, quiet news for the strip. A June job openings print above 7.25 million with a quit rate ticking up to 2.1 percent reinforces Monday’s ISM manufacturing surprise as read across into the labor side and walks the December second cut back inside the 50 percent line. A June job openings print falling under 6.95 million with a quit rate at 1.9 percent flags labor-side softening that offsets Monday’s ISM print, pulls the December second cut probability back through the 65 percent line, and reads as consistent with the two-cut year priced in the strip.

The vacancy-to-unemployed ratio at 1.05 in May sits nine basis points above the 0.96 pre-pandemic 2019 average. A June ratio print at or under 1.00 reads as the labor market having fully closed the post-pandemic tightness gap and pulls the Sahm-rule watch onto the July NFP unemployment print at 4.1 percent for the first time since March 2025.

June factory orders at 10 ET

The US Census Bureau publishes the June factory orders report at 10:00 ET. The July 27 advance durable goods release printed June new orders at plus 0.3 percent month over month at 334.8 billion dollars, following a May decrease at minus 4.0 percent. Excluding transportation the durable line printed plus 0.6 percent. Computers and electronic products at plus 3.1 percent to 31.1 billion dollars led the increase, up nine of the last ten months. The Tuesday full factory orders report incorporates the durable line already released and adds the nondurable goods line the advance report did not carry.

The line the strip reads on the June factory orders print is the core capital goods orders (nondefense capital goods excluding aircraft) revision against the plus 0.2 to plus 0.4 percent band the advance release carried at plus 0.3 percent. A core capex revision to plus 0.5 percent or higher confirms the goods-side capex bid the July ISM new orders print at 55.4 flagged and adds directional weight against the December second cut. A core capex revision to zero or worse flags goods-side hesitation ahead of the July 30 FOMC decision and reads as one-off manufacturing survey noise on Monday’s ISM print rather than a directional shift in the goods economy.

The nondurable goods orders line in the June report carries the energy-price-inclusive read the advance durable report does not. A nondurable print at plus 0.3 percent or higher with petroleum and coal products holding a positive contribution reads as consistent with the June PPI final demand print at plus 0.1 percent month over month and does not walk the tariff pass-through story further along the goods CPI channel. A nondurable print under minus 0.2 percent flags a demand-side softening that offsets Monday’s ISM manufacturing surprise.

The Wednesday setup

Wednesday August 5 runs the July ADP employment report at 8:15 ET and the July ISM services PMI at 10:00 ET. The June ADP print at 119 thousand carried the ADP-NFP correlation break the desk has read across into July from the June NFP at 139 thousand. The July ADP print inside plus 100 to plus 140 thousand with July ISM services holding at or above 50 and prices paid moderating under 65 reads as the services side confirming Monday’s ISM manufacturing surprise as breadth rather than one-off signal. A July ADP print above plus 175 thousand with July ISM services headline above 53 reinforces Monday’s ISM manufacturing reprice, walks the December second cut past the 45 percent line into a single-cut year, and puts a December 2026 SR3 implied year-end rate above 3.85 percent back on the table.

The July ISM services prices paid sub-index at 66.9 in June printed the highest read since November 2022 and held the last-mile services-inflation stall the June core PCE at plus 2.6 percent year over year confirmed. A July prices paid print holding above 66 with July ISM services headline above 52 reads as the services-side pricing pressure the September cut has to absorb without repricing the near-term cut path, adds direct weight against the December cadence, and pulls the September dot plot on the September 17 SEP into a debate about the terminal rate anchor rather than the September cut itself.

Where the priced curve sits going in

The September 17 cut stayed priced at 99 percent through Monday’s close. The active trade Tuesday is the December 10 second cut probability at 58 percent, fourteen points off Friday’s 72 percent close and inside the 50 to 65 percent range that reads as the market carrying a live debate between a two-cut year and a single-cut year rather than committed to either. The March 2027 third cut probability at 32 percent printed fourteen points off Friday’s 46 percent close.

The December 2026 SR3 contract implied a year-end fed-funds rate of 3.79 percent at Monday’s close, six basis points higher on the session and consistent with the December second cut probability now sitting inside the 50 to 65 percent range rather than at 72 percent. The March 2027 SR3 contract implied a first-quarter 2027 rate of 3.51 percent, seven basis points higher on the session and consistent with the reprice at both the December cadence and the March 2027 third cut probability. The December 2027 SR3 contract implied a 3.18 percent terminal, off the twelve-month low the Friday close held.

The week ahead carries the strip through the last labor and activity reads the September 17 SEP will incorporate before the pre-decision blackout opens Saturday September 6. Monday’s ISM manufacturing reprice pulled the debate off the terminal anchor and onto the December cadence: a firm July NFP Friday walks the December second cut past the 45 percent line and prints a single-cut year, a soft July NFP Friday walks the December second cut back through the 65 percent line and validates the two-cut year the strip carried into the July 30 statement.

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