Futures Stronger Overnight Ahead Of 30Y Supply

In post-Tokyo trade, JGB futures are sharply higher, closing +20 compared to settlement levels, after US tsys bull-flattened following weaker-than-expected US economic data ahead of the 4^th of July holiday.

• US tsys gapped higher after ISM Services index data came out lower than expected (48.8 vs. 52.6).
• There were also further signs of cooling in the labour market: ADP employment was modestly lower than expected in June at 150k (cons 165k) after a slightly upward revised 157k (initial 152k) in May; Initial jobless claims were slightly higher than expected at 238k (sa, cons 235k) in the week to Jun 29 after a marginally upward revised 234k (initial 233k).
• Little reaction to the FOMC June minutes release given that there was nothing that hasn't been relayed by Fed speakers over the last couple of weeks. “A number of participants remarked that monetary policy should stand ready to respond to unexpected economic weakness.” Most FOMC members – but not all -- believe monetary policy is restrictive and helping to gradually cool the economy and lower inflation.
• Focus now turns to the employment report on Friday.
• Today, the local calendar will see weekly International Investment Flow data alongside 30-year supply.
• (Bloomberg) Japanese bonds bracing for tough 30-year auction. (See link)