Municipals lost 3/4 to a full point yesterday as a jump in factory orders became the latest sign of economic muscle to unnerve the credit markets ahead of tomorrow's September employment report

"It's just that the bearish tone continues, there's potentially damaging news at the end of the week, and if that were to occur, forget about 8%, you're going to see the long bond blow right through 8%," one trader said.

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