Futures are flat this morning following unemployment data that supports the widely held expectation of a rate cut when the FOMC meets Sep 17-18.

The algos are presently concerned with the yield curve, which continues to warn of further downside, tomorrow’s jobs report, and a pesky gap which refuses to be ignored.

continued for members…

Remember, the gap is at SPX 5463.22.Currencies are mixed, with the EURUSD supporting equities and the USDJPY arguing otherwise.

GC and SI are still struggling to decide on next moves. Should they respond to falling inflation or to geopolitical events? GC looks likely to backtest its 1.618 and SI is on the bubble, contemplating either a big plunge to 25 or pop to 31. Meanwhile, CL and RB continue slipping lower, contributing to the 10Y breaking down.

At present, the 2s10s is at a +.008 – barely positive, but on the brink of a more important move.Both the 2Y and the 10Y are on the brink of a bigger breakdown.Just a reminder, I will be off on vacation next week. I’ll check on the market from time to time and will post if anything unexpected occurs. But, early morning posts will be few and far between.

At present, it appears that SPX needs to close the gap in advance of a weakish jobs print tomorrow in order to resume its ascent. I don’t see the market falling apart at this point, but the yield curve suggests it’s a distinct possibility in the next few months – probably after the US elections.

GLTA