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UST 10Y yield held steady at 4.10% after rising nearly 7bp to 4.08% on recent trading, driven by BoJ hike hints prompting repatriation flows and heavy corporate supply. 2Y yield fell 2.4bp to 3.515%, steepening the curve with 10Y-2Y spread widening to ~0.55-0.59% amid softening labor data and Fed cut odds at 88% for next week. IG corporate spreads edged wider by 3bp to 85bp on $45B supply outpacing $6B inflows, though new deals oversubscribed 4x with tight 1.3bp concessions. HY spreads tightened modestly, supported by risk recovery in equities and crypto, while MBS and EM debt advanced on dovish Fed rhetoric. Curve rallied earlier on NY Fed Williams’ cut advocacy post-jobs report showing 119K adds but 4.4% unemployment.​

Outlook favors further UST downside if PCE and ADP data confirm labor weakness, pricing 25bp Fed trim while BoJ dynamics cap rallies. IG remains resilient at historical tights despite supply, but watch maturity walls and recession risks for 115-200bp spread peaks post-downturn. Duration extension viable in 2Y-5Y bucket for yield grab, hedging long-end vol amid 4.00% Q-end 10Y forecasts. Credit rotation to HY/EM attractive on tight IG value, balancing softening growth with solid balance sheets. Volatility persists on policy cross-currents, favoring barbell strategies over curve steepeners.