*** Gist of Tsy market trading heavy........>

US TSYS: *** Gist of Tsy market trading heavy today. Curves bear steepening,

continue to extend session lows after deceptively strong Sep ADP gained +230k

vs. +185k est this morning.

* Differences in ADP/BLS methodology aside -- rates getting hammered, ylds

making new highs for year (10Y 3.119%, 30Y 3.277%) with other factors at play

ahead Fri's NFP data.

* * While tactical market traders play catch-up with the move, larger factors at

play

* Anecdotal comment from long-time market watcher on sell-off: "If I were a

voting member of FOMC I would want rates up good bit higher than today. I think

next recession is going to be brutal unless Fed has ample room to cut. Yield

curve be damned." Source added it's "easy to see next recession will be squarely

on Fed's shoulders. There won't be any fiscal room to maneuver."

* Much better selling on way down, rather heavy put buying in Eurodollar and Tsy

options, implied vol not consistently higher.