⚖️💵Rates & Dollar Trading In Line After Data: Cable FX Macro

• The chart below shows our measures for dollar rate differentials and the dollar index. The latter saw choppy trading heading into the NA session and data in the form of ISM services index

• August ISM Svcs PMI jumped to 54.5 vs the Bloomberg consensus of 52.5. The metric came to top the highest forecast in the range of projections and marked levels not seen since February. Prices paid rose to 58.9, employment rose to 54.7 (highest since November 2021), business activity now at 57.3

• On the release, both rate spreads and the dollar spiked higher as the overnight index swaps market repriced odds of a Fed November rate hike

• U.S. 2-year yield is near session highs and above 5.0%, up 6.9bps on the day. 2s10s flattens by 3.7bps while 5s30s flattens by 7.6bps