Tsy Yield Surge on Late Month End Rebalancing, Data, Hawkish Fed Ahead?

Month end portfolio rebalancing/position extensions added to session volatility Wednesday, Bonds extending well past pre-NY session lows after the close, 30YY tapping 3.2926% high compared to 3.2063% midmorning low.

• Perhaps markets also reacted to late MNI Fed podcast the Federal Reserve is likely to deliver another aggressive 75 basis point rate hike in September to catch up with an inflation problem that officials failed to foresee, ex-Dallas Fed economist Joseph Haslag told MNI’s FedSpeak podcast.
• That kind of move is needed “just to get to the path that almost everybody agrees they’re going have to get to," Haslag said. "So why hold off – that’s going to be the essential driving force around the table.”
• Tsys blipped off lows after latest ADP came out lower than expected (+132k vs. +300k est) - quickly discounted, however, as Tsys reverse move back to pre-release levels.
• That was followed by Chicago Business Barometer: PMI 52.2, in-line w/ market estimate, stocks taking the over 50.0 expansionary read positively, ESU2 +27.5 at 4015.0 in early trade.
• Meanwhile, Equities extended session lows by the bell as well, ESU2 -30.0 at 3957.5, Crude weaker (WTI -2.64 ay 89.0), Gold weaker -13.82 at 1710.20.
• Focus turns to Thursday's Weekly Claims, Unit Labor Costs, ISMs ahead Friday's headline August employment data (+300k est).
• Currently, 2-Yr yield is up 0.6bps at 3.4479%, 5-Yr is up 2.1bps at 3.2855%, 10-Yr is up 3.2bps at 3.1344%, and 30-Yr is up 4.1bps at 3.2568%.