The holiday-shortened week has given the markets a brief break from significant economic data. However, that doesn't mean they took the entire week off. Earlier this week, ISM (Institute of Supply Management) data came in hotter than expected, indicating that despite recent reports signaling economic slowdowns, there are still pockets of resilience. This is further supported by Initial Jobless Claims, which once again came in softer than expected. Fed Governors are maintaining their hawkish rhetoric on the speaking circuit, and the markets are eagerly listening for additional forward guidance. A September pause is almost certain from the market's point of view. However, there is a growing bet on an additional hike in November, with markets now pricing in about a 50/50 chance of a 0.25% increase on November's horizon.

Outside the US, investors are keeping a close eye on China, where concerns persist in both the real estate market as well as the broader economy. While these concerns may seem distant, they have had a direct impact on volatility in bond markets and are starting to gain more attention from a broader market audience.

The week will round out with a few more speeches from Fed Governors, which hopefully will provide additional clarity on the Fed's policy outlook. Hopefully the holiday provided some much-needed rest and relaxation as we prepare for the busy week ahead.