Late Session Volatility: What Sell-Off?

Tsy futures gapped higher (30YY 4.1436%) in the last few minutes -- likely month-end buying hitting an air pocket after Tsys gapped lower following the Tsy dept annc raising Q4 borrowing by $150B.

• Bonds had gapped lower right on the bell (30YY climbs to 4.2274% high), yield curves off lows after the US Tsy announced its current estimates of privately-held net marketable borrowing for the October – December 2022 and January – March 2023 quarters.
• During the October – December 2022 quarter, Treasury expects to borrow $550 billion in privately-held net marketable debt, assuming an end-of-December cash balance of $700 billion. The borrowing estimate is $150 billion higher than announced in August 2022, primarily due to changes to projections of fiscal activity, greater than projected discount on marketable securities, and lower non-marketable financing. Tsy Quarterly Refunding release Wed morning at 0830ET.
• Tue's ISMs likely to draw same muted reaction ahead Wed's FOMC policy announcement with 75bp expected, as much focus on year end guidance as current annc: step-down to a 50bp hike at the following meeting looks like the path of least resistance for now – the question is, how strongly does the FOMC seek to express that view. Employment data: ADP private jobs data early Wed (0815ET) followed by October read for NFP this Fri at 0830ET.