Futures Richer After US10YY Reverses Lower After Breaching 5%

In post-Tokyo trade, JGB futures are richer, closing +14 compared to settlement levels, after the US tsys finished 3-8bps richer across benchmarks. US 10-year tsy yield broke through the 5% mark for the first time since 2007, reaching 5.02% before reversing sharply to 4.85%. The yield curve flattened with the 2-year rate finishing 3bps richer at 5.05%.

• Bloomberg reported Bill Gross had covered short positions, while Pershing Square fund manager/CEO Bill Ackman tweeted he had covered shorts in US tsys in light of "too much risk in the world to remain short." Additionally, Reuters reported asset manager Vanguard is bullish on longer-dated US tsys after this year’s brutal selloff, betting that the Federal Reserve is at the end of its rate hiking cycle and that the economy will slow next year.
• The decline in yields provided support for equities, while the USD, gold and oil slumped.
• Geopolitics remained a focus, but the delay to a much-feared Israel ground assault on Gaza provided some stability to the markets as diplomats tried to prevent a wider regional conflict.
• On the data front today we have the preliminary PMI prints for October first up. Later on, September Department store sales are due.