TREASURY WRAP: T-NOTE FUTURES (Z6) SETTLE 11+ TICKS LOWER AT 106-16

Yields rise as oil chops on mixed US/Iran reporting and stronger-than-expected JOLTS ahead of midterms. At settlement, 2-year +1.8bps at 4.616%, 3-year +2.3bps at 4.682%, 5-year +3.2bps at 4.743%, 7-year +3.6bps at 4.834%, 10-year +3.8bps at 4.950%, 20-year +3.2bps at 5.351%, 30-year +3.3bps at 5.320%.

THE DAY: The yield curve bear-steepened on Tuesday, with long-end yields rising faster than the front end. Trade was choppy as the market digested ongoing geopolitical reports surrounding the status of US/Iran negotiations. Notable pressure in crude prices was seen on reports that the US had approved the draft MoU presented to Iran by the Qatari delegation on Monday, with both the US and Iran making concessions regarding the Iranian nuclear programme and frozen funds. WTI and Brent hit session lows following these updates, coinciding with T-Notes reaching session highs.

However, the lack of confirmation thereafter led to a sizeable reversal in crude prices and, consequently, Treasuries, before Iran's Secretary of the Supreme National Security Council Rezaei stated that the US response was not convincing and reiterated calls for Washington to fully and explicitly address Iran's seven conditions and act upon them. Crude ultimately settled lower, but well off troughs.

Alongside the rebound in crude prices weighing on Treasuries, reports of Meta kicking off its five-part USD bond offering, which was later reported to be targeting up to USD 15bln in the USD-denominated issuance alone, also likely pressured the Treasury complex through rate-lock-related selling. Reports later stated demand hit as high as USD 58bln on Meta's USD bond offering, and it was considering raising up to USD 25bln, up from the USD 20bln touted on Monday.

Thereafter, T-Notes went on to hit fresh session lows after the September JOLTS report showed job openings rising notably above expectations to 7.5mln, the highest reading since May. The Quits Rate also rose, suggesting greater confidence among workers in their ability to find alternative employment, while the rise in the vacancy rate signalled stronger labour demand from employers. The report does little to shift the overall Fed narrative, but it firmly keeps a December hike in play, as a stronger labour market gives the Fed more leeway to focus on inflation.

Attention turns to the US midterm election results tonight, ahead of Wednesday's Quarterly Refunding Announcement, with particular focus on any changes to issuance guidance and buyback commentary. The NFP report then follows on Friday, with analysts looking for 65k jobs added in October.

• US to sell USD 75bln of 17-wk bills on November 4th, to sell USD 115bln of 4-wk bills and USD 110bln of 8-wk bills on November 5th; all to settle on November 10th
• US sold 6-wk bills at a high-rate of 3.940%, B/C 2.88x

• Fed Hike Pricing via CME FedWatch: Dec 19.7bps (prev. 18.7bps), Mar 40.7bps (prev. 39.7bps).
• EFFR at 3.88% (prev. 3.88%), volumes at USD 108bln (prev. USD 109bln) on November 2nd.
• SOFR at 3.95% (prev. 3.95%), volumes at USD 3.268tln (prev. USD 3.175tln) on November 2nd. * NY Fed RRP op demand at 0.43bln (prev. 5.09bln) across 3 counterparties (prev. 6) on November 3rd.