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Futures Stronger Overnight, US Tsys Richer After Risk-Off Grips Markets

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In post-Tokyo trade, JGB futures are sharply higher, +23 compared to settlement levels, after US tsys bull-flattened in a risk-off session. The 2-year yield reached a low of 3.84%, before finishing 5bps lower at 3.86%, while the 10-year yield finished down 7bps to 3.83%.

  • Equities fell (Nasdaq futures -3.4% and -2.4% in S&P Eminis) with Nvidia down 9.50% after being subpoenaed by the DOJ. The SOX Index fell 7.75%.
  • A weaker-than-expected ISM report added to growth worries and catalysed heavy profit-taking heading into Friday's key jobs report.
  • The US ISM manufacturing index edged higher, to 47.2 in August. The headline index remains depressed after registering a fourth consecutive month in contractionary territory.
  • Projected rate cut pricing through year-end firmed 1-2bps vs. Friday close levels: Sep'24 cumulative -35bps (-33bps), Nov'24 cumulative -68bps (-66bps), Dec'24 -102bps (-100bps)
  • The major focus in the US this week is Nonfarm Payrolls on Friday. Later today the BoC rate decision will also be watched.
  • ICYMI, BoJ Governor Ueda reiterated on Tuesday that the central bank will continue to raise interest rates if the economy and prices perform as expected.
  • Today's data calendar has PMI services and composite revisions for August, which are unlikely to shift sentiment. BoJ bond purchases are on tap as well.
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In post-Tokyo trade, JGB futures are sharply higher, +23 compared to settlement levels, after US tsys bull-flattened in a risk-off session. The 2-year yield reached a low of 3.84%, before finishing 5bps lower at 3.86%, while the 10-year yield finished down 7bps to 3.83%.

  • Equities fell (Nasdaq futures -3.4% and -2.4% in S&P Eminis) with Nvidia down 9.50% after being subpoenaed by the DOJ. The SOX Index fell 7.75%.
  • A weaker-than-expected ISM report added to growth worries and catalysed heavy profit-taking heading into Friday's key jobs report.
  • The US ISM manufacturing index edged higher, to 47.2 in August. The headline index remains depressed after registering a fourth consecutive month in contractionary territory.
  • Projected rate cut pricing through year-end firmed 1-2bps vs. Friday close levels: Sep'24 cumulative -35bps (-33bps), Nov'24 cumulative -68bps (-66bps), Dec'24 -102bps (-100bps)
  • The major focus in the US this week is Nonfarm Payrolls on Friday. Later today the BoC rate decision will also be watched.
  • ICYMI, BoJ Governor Ueda reiterated on Tuesday that the central bank will continue to raise interest rates if the economy and prices perform as expected.
  • Today's data calendar has PMI services and composite revisions for August, which are unlikely to shift sentiment. BoJ bond purchases are on tap as well.