Market Roundup: Rates Reverse Fri's Sale, Downplay Aggressive Hikes

US rates trading strong, extending session highs at the moment as futures more than make up for Fri's sell-off on stronger than exp June employ report (+372k vs. +268k est)

• Yield curves mostly bull flattening (5s30s +1.862 at the moment at 13.541) even as short end trades strong after KC Fed George pushed back against need for "supersized" rate hikes, citing recession risks, unpredictable impacts from tightening financial conditions and market volatility. Markets had briefly started pricing in small chance of 100bps hike after Fri's data.
• Strong moves on light summer volumes, however, many accts near the sidelines to await Wed's CPI data: MoM (1.0% prior, 1.1% est); YoY (8.6%, 8.8%).
• Technicals for TYU2: Despite today's move after last week’s pullback from 120-16+, the Jul 6 high retracement lower is still considered corrective, as long as price remains above support at 116-11, Jun 28 low. A break is required to strengthen a bearish threat and this would signal scope for a deeper retracement. On the upside, a reversal higher would refocus attention on the short-term bull trigger at 120-16+.
• Cross asset: Crude and Gold prices remain weaker: WTI at 102.24 -2.55, Gold -4.10 at 1738.38. Equities taking cues from crude: SPX emini futures ESU2 -38.25 at 3863.0.
• Reminder: Earnings season kicks off this week, with financials and banks the early focus. Just over 5% of the S&P 500 by market cap are due to report, with the releases in focus including JP Morgan, Morgan Stanley, BNY Mellon, BlackRock, Citigroup, State Street, UnitedHealth and Wells Fargo.