Futures Down Tick Overnight, US Tsys Bull-Steepen Post-FOMC

In post-Tokyo trade, JGB futures have down ticked, closing -5 compared to settlement levels. US tsys posted a significant bull-steepening on Wednesday following the FOMC decision. The Fed left the funds rate unchanged as universally expected and released a more neutral statement. Fed Chair Powell said policymakers were unlikely to pivot to rate cuts in March. The FOMC stated: “the committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%”.

• US tsys had strengthened early in the NY session after a lower than expected ADP Employment Change: 107k vs. 135k est (prior down revised to 158k from 164k). Further support came after the Tsy Quarterly Refunding announcement and Employment Cost Index at 0.9% vs. 1.0% est.
• US equities closed weaker and near lows, with S&P 500 e-mini futures down 1.6%.
• Focus now turns to Weekly Claims, Flash PMIs and ISMs later today, followed by Non-Farm Payrolls data for January on Friday.
• Today, the local calendar sees Weekly International Investment Flows and Jibun Bank PMI Mfg data, along with 10-year supply.