Core FI Head Lower As Japan Is Back From Holidays

Firmer risk appetite has weighed on core FI this morning, amid a decent showing from regional equity benchmarks and as U.S. equity index futures have turned green. Little to change the state of play so far, but worth noting that Japanese and Singaporean participants have returned to the market after public holidays. U.S. President Trump's presser was interrupted by a shooting incident next to the White House complex, but after a short break the President resumed his briefing, telling reporters that he considers slashing capital gain tax and middle-income tax. T-Notes last trade -0-02 at 139-26, probing the water under overnight lows. Cash Tsy yields sit slightly higher across the curve. Eurodollars last seen unch. to +0.5 tick through the reds. Domestic PPI data and Fedspeak from Daly & Barkin headline in the U.S. today.

• JGB futures have retreated from the off, showing at worst levels since mid-Jul. The contract last deals -22 at 152.07. JGB yields sit higher in cash trade. Japan reported wider than expected BoP current account surplus and focus moves to the Eco Watchers Survey.
• Australian YM -0.5 & XM -0.5, with the latter testing its SYCOM lows, while cash ACGB yields trade marginally higher across the curve. Bills trade -1 to +1 tick through the reds. On the data front, Australian NAB Business Confidence Index fell to -14 from 0, but Conditions improved to - from -8. Elsewhere, the AOFM auctioned A$150mn worth of 2.50% 20 Sep 2030 linkers, drawing bid/cover ratio of 4.00x.