Waiting for payrolls

Relative to some of the recent moves, this morning has seen a less volatile session as we await the US employment report later this afternoon. There has been a flattening bias in both the UST curve and the German curve this morning, mostly driven by higher yields at the short end.

• Eurozone PMI data was mixed with Italian and Spanish data higher than expected while German and French services data was revised lower.
• A low payrolls print today could put in jeopardy hopes from FOMC members to speed up the pace of tapering in December (as recent communications have suggested).
• TY1 futures are up 0-2+ today at 130-20+ with 10y UST yields down -0.3bp at 1.443% and 2y yields up 0.7bp at 0.623%.
• Bund futures are down -0.14 today at 172.61 with 10y Bund yields up 0.4bp at -0.368% and Schatz yields up 1.2bp at -0.772%.
• Gilt futures are down -0.14 today at 126.45 with 10y yields up 0.2bp at 0.812% and 2y yields unch at 0.530%.