The US cash Treasury tape opens Friday August 7 at 8:00 ET into the July nonfarm payrolls release at 8:30 ET, the single print the entire post-FOMC data week has been staged against. Thursday’s weekly initial jobless claims at 224 thousand and Q2 preliminary nonfarm productivity at plus 1.9 percent confirmed the labor-side softening trajectory the September cut is pricing without pulling the December second cut probability off its 68 percent line. The September 17 cut stayed priced at 99 percent through Thursday’s close. The December 10 second cut probability carries the labor-side breadth debate directly through the 8:30 ET print. The active trade is not the September dot, it is the December cadence and the March 2027 third cut probability the July NFP reads directly into.

The three prints inside the 8:30 ET stamp

The Bureau of Labor Statistics Employment Situation release at 8:30 ET is three prints, not one. The July initial headline, the May two-month back-revision, and the June one-month back-revision publish under the same timestamp. The last twelve months of releases have carried a net downward revision of roughly 45 thousand per month across the two revision rounds combined. The strip has learned to price the back-revision as the higher-signal number because the two-month revision incorporates response rates of roughly 93 percent against the initial print’s response rate of roughly 65 percent. A May two-month revision that walks the May initial 154 thousand print down through 100 thousand carries as much weight for the December second cut probability as the July initial headline itself.

The June NFP print at 139 thousand with the unemployment rate at 4.1 percent and average hourly earnings at plus 0.2 percent month over month carried the labor-side softening trajectory the September cut is pricing. The June-into-July step is the read the desk carries: the trailing three-month average NFP at 147 thousand sits well inside the 100 to 175 thousand band the July 30 SEP staff projections priced as consistent with the two-cut year the statement carried. The trailing six-month average at 163 thousand sits at the top of that band, meaning the recent trend has been softening inside a still-firm six-month backdrop.

The three lines the strip reads

The line the strip reads on the July NFP initial print is three separate ranges layered together: the headline against the plus 100 to plus 150 thousand band, the unemployment rate against the 4.1 to 4.2 percent band, and the average hourly earnings against the plus 0.2 to plus 0.3 percent month over month band. All three have to land inside their bands for the reaction to hold the pre-print curve.

A firm July NFP print (headline above plus 175 thousand, unemployment holding at 4.1 percent, AHE at plus 0.3 percent) walks the December second cut past the 45 percent line and prints a single-cut year. This is the outcome Monday’s July ISM manufacturing headline at 55.6 flagged as a live tail. The December 2026 SR3 implied year-end fed-funds rate would carry roughly 15 basis points higher into Thursday’s close level, and the March 2027 third cut probability would fall back through 35 percent for the first time since May.

A soft July NFP print (headline under plus 90 thousand, unemployment lifting to 4.2 percent, AHE at plus 0.1 percent) walks the December second cut back through the 72 percent line and validates the two-cut year the July 30 statement priced. The March 2027 third cut probability would walk back through 58 percent, pulling the terminal-rate anchor debate directly into the September 17 SEP dot-plot median. This is the outcome the June JOLTS quit rate at 2.0 percent and the ISM services employment sub-index at 47.2 flagged as the live base case.

A middle print (headline plus 100 to plus 150 thousand, unemployment holding at 4.1 percent, AHE at plus 0.2 percent) holds the pre-print curve and reads as quiet news for the strip. The desk carries this as the modal outcome inside the trailing three-month average of 147 thousand. The reaction in this outcome runs on the back-revisions, not the headline.

The unemployment rate against the 4.2 percent line

The unemployment rate at 4.1 percent in June has held inside the 4.0 to 4.2 percent band since March. A July print at 4.3 percent would print the highest unemployment rate since October 2021, would confirm the Sahm-rule watch the labor-side softening trajectory has been running against, and would pull the September cut cadence past 99 percent into implied prior action pricing for the first time this cycle. The Sahm rule triggers at a 0.5 percentage-point rise in the three-month moving average of the unemployment rate against its trailing twelve-month low. The three-month average through June sits at 4.10 percent against a trailing twelve-month low of 3.80 percent, meaning a July print at 4.3 percent would carry the three-month average to 4.17 percent and land the Sahm gap at 0.37, still inside the 0.50 trigger band but close enough to price against.

The AHE line and the wage-side read

The average hourly earnings print at plus 0.2 percent month over month in June carried the wage-side moderation the June PCE at plus 2.6 percent year over year has been running against. The year-over-year AHE line at plus 3.7 percent in June sat 20 basis points above the two-percent PCE target plus a productivity-consistent 1.5 percent real-wage growth threshold, meaning the wage-side pressure the July 30 Waller and Bostic dissents flagged remains inside the range that could still resolve either way. A July AHE print at plus 0.4 percent month over month with a year-over-year lift to 3.9 percent would confirm the wage-side pressure the Q1 unit labor costs print at plus 3.2 percent annualized carried and would add direct weight against the September cut cadence, running counter to the labor-side softening the headline read.

The band the ten-year has to hold

Thursday-into-Friday Globex carried the ten-year futures in an implied cash-equivalent yield band consistent with the ADP-and-ISM-services combination the desk read Wednesday. A break of the 4.00 percent floor through the 8:30 print reads as a soft July NFP surprise reinforcing the labor-side softening trajectory, pulls the December second cut probability back through the 72 percent line, and validates the two-cut year the July 30 statement priced. A break of the 4.15 percent ceiling through the 8:30 print confirms the firm-headline scenario, walks the December second cut past the 45 percent threshold into a single-cut year, and pulls the December 2027 SR3 implied terminal above 3.25 percent back on the table.

Where the priced curve sits going in

The September 17 cut stayed priced at 99 percent through Thursday’s close. The December 10 second cut probability at 68 percent carries the labor-side breadth debate through the 8:30 ET July NFP print into the August 22 Jackson Hole opening. The March 2027 third cut probability at 52 percent carries the terminal-rate anchor debate through the September 17 SEP into the December cadence. The December 2026 SR3 contract implied year-end fed-funds rate at Thursday’s close prices the same debate the December second cut probability does: whether Monday’s ISM manufacturing surprise and Wednesday’s ISM services breadth reads as a one-off goods print inside a still-softening labor backdrop, or as breadth across the labor and services sides that pulls a single-cut year back onto the table.

The week’s close

The July NFP print closes the first data week post-FOMC blackout and hands the strip to the two-week window before August 12 July CPI at 8:30 ET, the next single-print event the September dot-plot cycle stages against. Between the July NFP and the July CPI sits the August 8 UMich preliminary consumer sentiment and inflation expectations release at 10 ET, the last data point before the CPI release that carries direct read into the FOMC reaction function. A confirming July NFP with a firm July CPI would print the single-cut year the two-cut priced hedge sits opposite of, while a soft July NFP with a moderating July CPI would confirm the two-cut year through the September 17 statement. The desk carries both prints as tail-conditional.

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