US Treasury futures (cash market was closed) rallied across the curve as investors shift focus to the labour market. The trigger came from ADP’s data that showed 11.25k jobs lost on average each week in the four weeks ending 25 October. Notably, this marks a much grimmer picture than the 42k jobs gain that ADP reported for October last week. With this print, alternative data (including Challenger job cuts and Revelio's labour market data) point to significant employment weakness in the near term. With an end to the shutdown in sight (the house is set to vote on a spending package imminently that would keep the government open through end January), the odds of a deeply negative October NFP print is high.
Against this backdrop, we retain our long bias for USTs in the short term with a slight preference for the front end. We don't think that the Fed would want to pause in December if job creation is weak, Fed Chair Powell's pushback notwithstanding. Fed funds futures are probably under pricing the odds of a December cut (currently pricing in about 66% chance of a cut). Asymmetrical downside risks to the labour market and lingering worries about Fed independence (rates would be kept too low) would also likely keep a bid on front to belly tenor USTs in the near term. 
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