Bonds moved with Fed funds futures

Bonds price moved up with the changing expectations of the Fed funds futures. The chart shows the changing probability of the Fed funds futures over the month of October. The market has priced in the move to 4.5%, a 25 bps change. A close look at the bond futures chart would show that the bond market has rallied in tandem to the changes in these probabilities.

Currencies have followed a similar pattern. The dollar firmed earlier in the month until the probability of Fed moved significantly higher. The dollar decline matched the view for lower rates.