Futures Sharply Higher, US Tsys Firm After Weaker Data, Positive Supply News & Steady FOMC

In post-Tokyo trade, JGB futures are sharply higher, closing +30 compared to settlement levels, after US tsys rallied 14-21bps across benchmarks to start November following a brutal October.

• The FOMC left rates unchanged for the second consecutive time. While discussing whether every meeting is "live", Chairman Powell said, "We are going meeting by meeting, asking ourselves whether we achieved a stance of policy sufficiently restrictive to bring inflation down 2% over time" and "We have come very far with this rate hiking cycle, very far." The projected Fed terminal rate slipped to 5.395% in Jan’24.
• Early, US tsys shifted richer after lower-than-expected ADP private jobs data (113k vs. 150k est, 89k prior). The move extended after weaker-than-expected ISM data: Mfg (46.7 vs. 49.0 est), Employ (46.8 vs. 50.6 est), New Orders (45.5 vs. 49.8 est) and Prices Paid (45.1 vs 45.0 est).
• Longer dated US tsys were also buoyed by the November refunding news that moderated the pace of increases to auction volumes and concentrated at the front end.
• Today, the local calendar sees Monetary Base and International Investment Flow data, along with 10-year supply.