Market Roundup: Data Underpins Hawkish Policy Exp, Ylds at Mid-Yr Highs

Tsys continue to extend lows into midmorning, yield curves bear steepening (2s10s + 5.030 at 25.410) with long end taking brunt of selling, 30YY tapped 3.4091% high last seen June 16.

• Data continues to underscore "higher for longer" policy expectations amid renewed selling on heavy volumes (TYZ2>1.1M) as ISM mfg sub-index climbs to highest since Mar (54.2) after weekly claims slipped to 232k earlier - third consecutive decline.
• Focus turns to Fri's August employment read, +300k job gains estimated.
• Technicals for Dec 10Y currently at 115-27 (-102): Bearish theme extends: recent breach of 117-11+, Jul 21 low, reinforced bearish conditions. This paved the way for a move towards 116-01+, the 61.8% retracement of the Jun 14 - Aug 2 rally, that has been pierced today. A clear break of this support would strengthen the case for a move back to 114-06, the Jun 14 low. Initial firm resistance has been defined at 118-00, Aug 26 high.
• Flows, Carry-over selling from late Wednesday partially ascribed to late month end rebalancing, followed by unconfirmed chatter of central bank selling this morning, stops triggered on the way down, real$ selling joining prop and fast$ selling in 5s-30s, flattener unwinds. Earlier Block buy >17k FVZ2 helped futures bounce before iceberged seller(s) resumed.