Futures Slightly Higher Overnight, US Tsys Look Past Jobless Claims, Labour Earnings Miss

In post-Tokyo trade, JGB futures are slightly higher, closing +5 compared to settlement levels, after US tsys finished 1-7bp richer across the major benchmarks. The curve steepened. US tsys were briefly pressured as the latest round of US data continued to show a robust labour market.

• Initial Jobless Claims came out lower than expected (216k, 234k est). Meanwhile, Unit Labor Costs printed higher than expected at +2.2% vs. +1.9% est.
• TYZ3 breached post-ISM lows, but losses were pared for the remainder of the session.
• TYZ3 is being marginally pressured in early Asia-Pac trade after Fedspeak from Dallas Fed President Logan crosses. Logan noted that the Fed may need to follow through on market expectations for rate hikes and that the labour market suggests that the Fed hasn't finished the inflation job.
• Labor and Real Cash Earnings for July print well below expectations at +1.3% y/y and -2.5% y/y versus estimates of +2.4% and -1.4% respectively. This is likely to support JGBs in early Tokyo trade.
• Today the local calendar also sees GDP (Q2 F), BoP (Jul) and Bank Lending (Aug), along with BoJ Rinban operations covering 1- to 25-year JGBs.