Market Roundup: Off-Sides Positioning Meets Low Pre-NFP Liquidity

Tsy futures extending session lows at the moment (10YY taps 3.), initial impetus tied to sympathy move with sell-off in EGBs, particularly longer Gilts apparently as mkt expresses dissatisfaction with poorly researched/planned buy scheme introduced last week.

• Wealth destruction and maximum pain: Off-sides positioning meets low liquidity ahead Friday's September NFP (+250k est vs. +315k prior; wide dealer range from +200k low to JPM high at +389k)
• Sell-stops triggered on the way down while couple Dec'22 10Y future block sales (over 11k total) contributed to yield tapping 3.8377% high before pause in selling sees yield back around 3.8317%.
• Earlier react: Tsy gap bid extended early session highs following higher than estimated weekly claims (+219k vs. +204k est), quickly retrace appr half the move. Fed speakers running through greatest hits: combination of hiking, quantitative tightening, worth risking recession to bring inflation under control. MN Fed Kashkari recently: high bar to shifting their policy stance.
• Technical view for TYZ2 at 111-28 (-21): Tsys holding entirety of Wed's pullback,
  with corrective bounces short-lived and keeping the short-term condition bearish. The rally posted since the beginning of the week has allowed the oversold condition to unwind, and markets now re-target support at 111-20+, the Sep 29 low. Any recovery higher will need to again top the 20-day EMA ahead of 114-31+, a Fibonacci retracement.