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Short End Gains Late, Yld Curves Off Lows

US TSYS

Treasury futures currently trading firmer, upper half relatively narrow range. Modest volumes, TYU2 just over 1M with active accts staying close to sidelines ahead Fri's headline jobs data. Short end gaining momentum in late trade, yield curves well off early inverted lows: 2s10s currently +0.249 at -36.414 vs. -39.611 (lvl not seen since Sep 2000).

  • After initial post-BOE rate annc bounce, Bonds extended highs with desks citing mix of higher than expected continuing claims (1.416M vs 1.383M est) as well as geopolitical risk as tensions in APAC region. Tension high after China launched multiple rockets over Taiwan, five of which landed inside Japan's EEZ region. Def Dept asst sec Kirby said he hopes China is not trying to engineer a conflict in region after House Sp Pelosi visit Tuesday.
  • Data on tap for Friday: Change in Nonfarm Payrolls (250k est), Change in Private Payrolls (230k est), Unemployment Rate (3.6%), Average Hourly Earnings MoM (0.3%), Labor Force Participation Rate (62.2%), Consumer Credit ($26.0B).
  • Cross asset update: Stocks near steady (SPX eminis at 4156.0), DJIA -82.53 (-0.25%) at 32731.34; Nasdaq +35 (0.3%) at 12703.56; Spot Gold surge continued +28.15 at 1793.44; Crude continues to fall (WTI -2.25 at 88.41).
  • Currently, 2-Yr yield is down 3.5bps at 3.0305%, 5-Yr is down 5.6bps at 2.7702%, 10-Yr is down 3.4bps at 2.6702%, and 30-Yr is up 1.2bps at 2.9573%

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