BMO Survey: Bearish Bias Into NFPs, Little Lasting Impact On Tsys/Fed

To recap, BMO note that their pre-NFP survey "demonstrated a decided bias to sell into strength; 52% would do so in a post-payrolls rally versus a 37% average - the highest since March 2014. Meanwhile, if the market sells off, just 31% would buy the dip (lowest since April 2017) and 65% (highest on record) would do nothing compared to respective averages of 41% and 51%. This implicit bearishness was also reflected in the outlook on the next 15bp in 10-year yields – 71% said higher, and 14% said lower. Another highest-on-record read in the case of the former, and lowest since May 2011 regarding the latter."

• "This being said, our first special question revealed little conviction that any resulting repricing will be sufficient to recast the broader trading range. The median June FOMC to Labor Day 10-year yield range was 1.50% to 1.79%. The minimum rate expected for the high yield print was 1.65%, with a max of 2.04%, while the loftiest range bottom offered was 1.65%, and the trough of the replies was 1.35%. A low outright 29bp 10-year yield range centered around roughly current levels certainly resonates with the characterization of a summer spent trading from home with the backdrop of an uncertain macro outlook."
• "As for our second special question and the expectation for the fate of the (Fed's) 2023 median dot at the June update to the SEP, the most common response was an unchanged 12.5bp with 44%, however 25bp was a very close second with 43% of replies. 37.5bp took 10% and 50+bp claimed 3%. With less than two weeks until the policy decision and refresh of the formal forecasts, the price action in the belly promises to be a space to watch as liftoff estimates are further refined ahead of the Fed's revisions to their formal outlook."