The TMV ETF, which aims to deliver three times the inverse performance of the ICE U.S. Treasury 20+ Year Bond Index, is poised to react to the latest labor market data. Lower-than-expected US payrolls figures could trigger increased buying in longer-dated US Treasuries, potentially leading to a short-squeeze due to the current excessive short positioning. This scenario aligns with expectations for more than one Federal Reserve rate cut this year, as softer labor market data, including rising unemployment indicators like the U6 rate, suggest potential economic weakness.
Investors are closely monitoring the labor market, with recent reports indicating a mixed picture. While initial jobless claims were lower than anticipated, continuing claims are on the rise, and the Challenger Job Cut report showed an increase in cuts for December and the fourth quarter compared to 2023. These factors contribute to the narrative of a potentially softer labor market, which could bolster demand for longer-dated Treasuries and impact the TMV ETF's performance.
As of 07:31 on January 10, TMV is trading at $42.12, nearing its 52-week high of $42.70. The ETF's movement reflects the broader market's anticipation of labor market data and its implications for Treasury yields and Federal Reserve policy.