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JOBS, recession signals and a housing downturn?Jobs, jobs, jobsThe markets are holding their breath for July's non-farm payrolls data out of [View in browser]( [Bloomberg]( JOBS, recession signals and a housing downturn? Jobs, jobs, jobs The markets are holding their breath for July's non-farm payrolls data out of the US, with economists forecasting that employers added 250,000 jobs. On Thursday, Labor Department data [showed]( that initial jobless claims increased by 6,000 to 260,000 in the week ended July 30. The data comes at a time when [the gap]( between two- and 10-year Treasury yields has turned deeply negative. Recession signals The slowdown in [semiconductor sales]( is yet another sign of the worsening state of the global economy. Chip sales show a good correlation with global demand and have decelerated for the sixth month in a row. US recession risks are also mounting, with Bloomberg's economists expecting one by the beginning of 2024 with [100% probability](, while banks including Wells Fargo and Deutsche Bank see one occurring even sooner. Elon Musk also reiterated [his comments]( that he thought a recession in the US was likely, expecting the downturn to be "mild" and lasting up to 18 months. Housing downturn From the UK to Canada, housing markets are showing signs of cooling. Toronto benchmark home [prices fell]( for a fourth straight month, a record-breaking streak of declines that some economists warn could become an historic downturn in Canada’s real estate market. Meanwhile in the UK, house prices declined for the [first time]( in a year in July as rising interest rates and soaring inflation finally took a toll, with the slowdown forecast to deepen in coming months. And in the US, mortgage rates slipped below 5% for the first time in almost four months, giving borrowers [a reprieve]( after this year’s rapid surge. The Federal Reserve’s campaign to curb inflation by driving up its benchmark rate is putting an end to the pandemic housing boom. Sales are now sinking and inventory is starting to climb. Stocks drift Futures on US equities were little changed on Friday, while European shares drifted lower before the big data announcement. The Stoxx 600 fell 0.2% at 5:30 a.m. New York time, with the S&P 500, Nasdaq 100 and Dow Jones seen flat. In currency markets, the dollar rose against most peers and gold edged lower. Oil was steady after recent declines and Bitcoin advanced above $23,000. Coming up... Yes, of course, it’s jobs day — both in the US and Canada. And that will definitely dominate proceedings. But we’re also expecting comments from the Bank of England’s Huw Pill, and Vladimir Putin is set to meet Turkey’s Recep Erdogan in Sochi, Russia. Later, there’s the release of the Baker Hughes oil rig count, and earnings include Adient, Cinemark as well as Goodyear. What we've been reading Here's what caught our eye over the last 24 hours. - China announces sanctions on [Nancy Pelosi](. - China [warships cross Taiwan Strait]( as drills continue. - Global stocks are being [shunned again](. - US climate bill makes now the best time to [go solar](. - Pimco clients pull [$29 billion]( as rate hikes hit bonds. - IVF patients are [trapped in Limbo](. - [Gun trafficking]( surges across state lines. And finally, here’s what Katie's interested in this morning The booming $1.3 trillion bond exchange-traded fund arena was delivered another win this week. CME Group Inc.’s clearing unit will accept a handful of short-dated Treasury ETFs to meet initial margin requirements, according to a Tuesday statement from the derivatives exchange operator. Five funds including the $18 billion SPDR Bloomberg 1-3 Month T-Bill ETF (ticker BIL) qualify, CME said separately. CME’s decision further knits fixed-income ETFs into the wiring of Wall Street’s market structure. Assets in bond ETFs have boomed in recent years as institutions and professional traders grow comfortable with the structure, a trend accelerated by the Fed’s move to buy credit ETFs at the height of the pandemic market turmoil in March 2020. “Overall, it’s another use case for ETFs, besides long-term investing, tactical directional bets, and hedging,” Strategas Securities ETF strategist Todd Sohn said. “Using ETFs just makes this so much more streamlined and efficient.” Short-dated Treasury ETFs are more “operationally efficient” to use as collateral given that they don’t mature, CME said. Unlike actual Treasuries — the proceeds of which must be re-invested after the securities mature — debt ETFs hold a constant maturity and thus don’t need to have the exposure rolled forward. Of course, it remains to be seen what demand looks like. But it’s an important signal as to just how important ETFs have become to the bond market’s structure. “The next question will be how or if this offering is utilized by clearing brokers, or do they largely still stick to the status quo of collateral posting,” said Kevin McPartland, Coalition Greenwich’s head of market-structure research. “This is another signal that fixed-income ETFs are cemented as a huge part of the fixed-income market.” Follow Bloomberg's Katie Greifeld on Twitter at [@kgreifeld]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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