Treasury Action: yields have jumped following the day's data

Treasury Action: yields have jumped following the day's data which at the margin, allayed growing recession angst. That will keep the Fed in play for now with a 75 bp still on the table. The decline in the ISM services report was smaller than the market expected, and the S&P Global services and composite PMIs were revised higher. The JOLTS data also weren't bad either, holding an 11k handle and just off of the record from March. But on the other hand, the drop in the employment component into contraction territory and the slide in the price index to the lowest since September, could give the FOMC doves some ammo. The short end and belly are underperforming given the Fed implications and are 10 bps cheaper at 2.916% on the 2-year and 2.90% on the 5-year, while the 10-year rate is up 7.5 bps at 2.880%. Fed funds future had largely priced out a lot of risk for a 75 bp hike this month, with the implied suggesting a 60 bp hike. Wall Street has been searching for direction amid the tug-of-war between aggressive Fed rate hike concerns and recession worries. The dollar index, DXY, remains very firm at 107.16 amid U.S. outperformance and Fed views, while Europe looks headed for recession and the UK government is in turmoil. WTI crude has been crushed and has dropped over -3% to $95.95.