Some positions taken off the table ahead of the FOMC meeting perhaps?
I'd argue that to be the case but we're seeing a uniform move across global bond markets and that could be suggesting that traders got a little too carried away in squeezing yields beyond what they may expect to be, considering the inflation debate.
10-year Treasury yields are down over 2 bps on the day now and nearing 1.52% with 2-year yields also down slightly to 0.45% as we get things going on the session.
There's still plenty of uncertainty with regards to how much and how long inflation is going to persist going into next year amid supply and capacity constraints, and the market may have played things up a little too much, too fast.
We're even seeing ECB bets pull back a little with market pricing retreating from pricing in a 10 bps rate hike in October 2022 to December 2022 today.
German 10-year bund yields are also down 2.5 bps to its lowest since 15 October after yesterday's fall - which was the steepest in four months.
