Dealing Mixed, Subdued NY Session Ahead Of Non-Farm Payrolls

ACGBs (YM flat & XM -3.0) are mixed after a relatively subdued NY session for US tsys. US tsys finished with a twist-steepening of the curve, pivoting at the 20s, with yields 4bps lower to 3bps higher.

There was little selling pressure from another tight reading on jobless claims and a narrower trade deficit, though a dovish tone from the Fed's Daly provided some support.

• US initial jobless claims remained stable at 207k, slightly below the consensus estimate of 210k. The four-week moving average also dipped to 209k, reaching its lowest level since February, ahead of Non-Farm Payrolls data later today.
• Trade Balance reported -$58.3B vs. -$59.8B est vs. a revised -$64.7B prior.
• SF Fed President Daly said, "If we continue to see a cooling labour market and inflation heading back to our target, we can hold interest rates steady and let the effects of policy continue to work".
• The cash ACGB curve has twist-steepened, with yields 1bp lower to 2bps higher. The AU-US 10-year yield differential is 3bps higher at -13bps.
• Swap rates are 1-2bps lower.
• The bills pricing is flat to +1 across the strip.
• RBA-dated OIS pricing is slightly softer across meetings.
• Today, the local calendar sees the release of the RBA’s Financial Stability Report.