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Weaker Pre-Payrolls

BONDS

Global core FI is a little weaker in the lead-up to the US nonfarm payrolls release at 0830ET/1330BST.

  • Treasuries, Bunds and Gilts cheapened in early European trade, with 10Y Tsy yields inching a little closer to 4%, and 10Y Germany punching decisively above 2.1%, helped by a beat on German industrial production data.
  • For the US employment report, consensus sees NFP growth moderating to 260k in Sep. MNI sees significant two-sided risk (preview here)
  • Outside of payrolls, not much on the calendar for the rest of the week (and note a long weekend ahead in the US, Canada and Japan): FOMC speakers include Williams, Bostic, and Kashkari.

Latest levels:

  • US: 2Y yield unch at 4.2556%, 5Y up 2.1bps at 4.0879%, 10Y up 1.3bps at 3.8367%, 30Y up 0.5bps at 3.7888%.
  • DE: 2Y yield up 2.3bps at 1.821%, 5Y up 4.6bps at 1.996%, 10Y up 4.8bps at 2.133%, 30Y up 2.5bps at 2.065%.
  • UK: 2Y yield up 3bps at 4.155%, 5Y up 2.2bps at 4.399%, 10Y up 3.3bps at 4.202%, 30Y up 3.2bps at 4.339%.
  • Italy / German 10Y spread 0.5bps tighter at 242.8bps

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