Bond yields climb to the highs of the day

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Tell me what bonds do in October and I’ll tell you what the rest of the market will do.

There’s a reasonably strong consensus that anything around 4% is attractive in the long term but the buyers aren’t rushing in or they’re being overwhelmed by mechanical selling and the kind of margin calls that caused the BOE to intervene.

I wouldn’t read too much into today’s price action because of quarter end but early next week will be telling. A soft non-farm payrolls report next Friday would certainly knock down yields (and the dollar).

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