- Treasury yields hit new intraday all-time lows overnight
- Traders were lined up to sell at the open (profit-taking)
- Weakness continued after stronger ISM data
- But bonds held near yesterday's closing levels
10yr yields rose from overnight lows of 1.32 to end the day at 1.373.
In other words, the current push
The CME open marks the beginning of the day for certain traders that won't be putting their trades in any earlier. If they're all waiting to do the same thing, that can make for a quick pop in the direction of the imbalance. Today's imbalance was skewed in favor of higher rates as investors sought to book profits on previous bond buying. Yields moved higher into the morning's only key economic release--ISM Non-Manufacturing--and then slightly higher
It's not that financial markets are too terribly interested in economic data at the moment, but they are sensitive to any major surprise in Friday's jobs report. Reason being: the Fed cares about Friday's jobs report. It's either going to confirm or allay their fears about a potential shift in labor market strength. Today's ISM data is just one of the early clues traders rely on to refine their NFP expectations.
The additional weakness post-ISM wasn't too terrible. 10yr yields flirted with negative territory all