US: It’s all about politics – BBH

Analysts at BBH point out that news from US of Special Counsel Mueller working with a grand jury appeared to weigh on sentiment late yesterday when news broke.  

Key Quotes

“Also, there were new leaks of President Trump’s private telephone conversations with two foreign leaders despite some recent personnel changes.  An unexpected and dramatic slide in the non-manufacturing ISM (53.9 from 57.4, the lowest since last August) suggest little on the horizon that will boost growth.  The US 10-year yield fell five bp yesterday and is pinned near 2.23% now.  A month ago, it stood at 2.35%. The market sees practically no chance of a September rate hike.”

“Moreover, if anything, the Washington drama raises concerns about the debt ceiling and the spending authorization that Congress must act on with limited time to maneuver in September.  Some see these issues impacting the Fed's decision on its balance sheet.  There have been some distortions in the T-bill market as investors seek to avoid the period in which the problem may be most acute (mid-October).”