The world may never know if today's Trump tweets have anything at all to do with his stance on the Fed's fund rate, but one things for sure: they were single-handedly able to deliver another de facto rate cut.  I'll explain...

The Fed cut its rates by 25bps yesterday, as expected.  Some pundits were calling for a 50bp cut.  Trump wanted this and roasted the Fed for not delivering.  

Today, Trump tweeted about another 10% tariff on another $250 bln of Chinese goods.  Markets reacted in a major way with one of the main effects being a sharp drop in Fed Funds Rate expectations.  As such, until further notice and unless something pushes back in the other direction, financial markets are pricing in at least 12.5bps of additional rate cuts by the end of the year.

Before the Trump tweet, there were already some indications that potential bond buyers were willing to buy.  In fact, they'd made their presence known even before the weaker ISM Manufacturing data (this week's 2nd biggest report).  But the buying in the first few hours of the day was gradual.  The Trump tweets took things to another level.

Tomorrow brings the week's most important data in the form of NFP (the big jobs report).  Yes, it has the power to push back on today's gains, but no, it doesn't have the power to completely change the current narrative.  On the other hand, if it's much weaker than expected, watch out for a big blowout in bonds--one that moves so quickly to long-term low yields that it forces a fairly quick correction tomorrow mid-morning or afternoon.  Just a hypothetical of course.... Anything can happen on NFP Day!