Regional Banks Wagged Treasuries, NFP Data Friday, Fed Exits Blackout

US rate markets had another whippy session, finishing higher Thursday, but off midday highs as regional bank concerns had a larger than normal effect on rates in the lead-up to Friday's April employment data (+180k est).

• Short to intermediate Treasury futures saw renewed support after the ECB hiked 25bp to 3.25%, setting the stage for steeper curves as Bonds lagged much of the day.
• Still well bid in early trade, Treasury futures marked session lows after higher than expected Unit Labor Costs (+6.3% vs. +5.5% est, near in-line weekly claims (242k vs. 240k est.
• Short to intermediate Treasury futures see-sawed higher from that point on apparently due to strong risk-off buying on regional bank concerns: PacWest Bank fell more than 60% after it confirmed it was in talks with potential investors early Thursday.
• By midmorning, shares of Western Alliance Bank sold off more than 50% after a FT wrote an article saying the bank was "exploring strategic options including a potential sale of all or part of its business". Western Alliance categorically denied the article and shares bounced but remained under pressure in the second half.
• Incidentally, Reuters exclusive reported "U.S. officials at the federal and state level are assessing the possibility of "market manipulation" behind big moves in banking share prices in recent days, a source familiar with the matter".