Policy Heads, Data, Geopol Risk Triggers Early Volatility

Tsys weaker after the bell, near middle of session range after volatile first half. Whippy price action after extending past overnight lows in early NY trade from nearly testing highs and now extending lows w/ 30YY tapping 3.2577% high. Several factors at play include policy headlines, geopol risk and data both domestic and foreign:

• Tsys pared early gains as Richmond Fed Barkin discussed economic outlook, "RECESSION IS RISK IN GETTING INFLATION UNDER CONTROL .. DOESN'T EXPECT INFLATION TO COME DOWN IMMEDIATELY, Bbg.
• Additional selling across the board on ECB'S KNOT comments/headlines: NOT CONVINCED THAT GOING BACK TO NEUTRAL ENOUGH .. MARKET PRICING OF RATE HIKE IN SEPT NOT UNWISE .. LEANING TOWARDS 75 BPS BUT OPEN TO DISCUSSION, Bbg.
• Meanwhile, UK Gilt yields climbing to mid-2014 levels, 10Y 2.75%, 30Y 3.03% as Goldman Sachs analysts warn "UK inflation could top 22% next year if natural gas prices remain elevated in the coming months", Bbg.
• Fast risk-off bid (that also spurred lows in stocks at the time on uptick in China/Taiwan tensions for risk-off move: headlines re: Taiwan fired warning shots at China drone spotted near an offshore island.
• Midmorning JOLTs number surprised by 864k to the upside - that's the fourth largest upside surprise of the past decade (only beaten in April 2021, May 2020 and July 2021). Data likely to give the Fed confidence at their upcoming policy meeting for a large move, particularly if backed up by strong Aug employment read this Friday (+300k est vs. +528k prior).
• Reminder, ADP will release it's retooled private-sector employment report early Wednesday (0815ET) after pausing the report back on June 30