Futures Uptick In Overnight Trade After US CPI Data

In post-Tokyo trade, JGB futures uptick, closing +3 compared to settlement levels, after US tsys finished 1-5bps richer across the major benchmarks. The US curve steepened. US tsys were volatile in the aftermath of the US CPI trade as core CPI printed a touch firmer than estimates. Core CPI rose from 0.16% to 0.28% m/m, with a large part of the acceleration driven by airfares contribution of 0.09%.

• FOMC dated OIS was stable, a terminal rate of 5.45% was seen for December with ~50bps of cuts by July 2024.
• The 30-year US tsy auction produced middling demand metrics.
• Japan PM Kishida plans to announce a 'bold economic package' by the end of September, which comes after the recent cabinet reshuffle (see this link for more details).
• Bloomberg reports that Japan life insurers could continue to buy JGBs instead of foreign bonds if the Bank of Japan further adjusts its yield-curve control, which it might do if the central bank finds prices and wages can keep rising sustainably. (See link)
• Today the local calendar sees International Investment Flow, Core Machine Orders, Industrial Production and Capacity Utilisation data, along with 20-year supply.