Core FI Under Pressure, Japan Markets Closed

T-Notes and Aussie bond futures came under pressure amid little appetite for haven assets, with Japanese financial markets closed in observance of a public holiday. Reports of progress in talks aiming to keep U.S. equity markets open to Chinese issuers helped buoy market sentiment.

• Aussie bond futures came under pressure amid recovery in risk sentiment and expectations that the RBA will raise the cash rate come the end of its monetary policy meeting next week. Above-forecast inflation data released Wednesday put pressure on policymakers to take action, with the OIS strip fully pricing a 15bp hike. YM last deals -7.0 & XM -10.0, with bills sitting 2-9 ticks lower through the reds. Cash ACGBs extended their opening gains, with yields on 10-Year & 3-Year ACGBs printing best levels since 2014. When this is being typed, cash ACGB yields trade 6.7bp-9.7bp higher across the curve. The auction for A$1.0bn of ACGB 0.50% 21 Sep '26 & light AOFM issuance slate for next week provoked little if any market response.
• T-Notes quickly gave away opening gains and continued to lose altitude, as U.S. e-mini futures were trimming losses. TYM2 changes hands +0-02+ at 119-14, hovering just above session lows, with Eurodollars running +1.0 tick to -0.5 tick through the reds. Cash Tsys were closed until London hours due to a market closure in Tokyo. Focus in the U.S. turns to PCE data, MNI Chicago PMI & U. of Mich. Sentiment, with FOMC members already in their blackout period ahead of next week's monetary policy meeting.