Futures Weaker After A Heavy Session For US Tsys

In post-Tokyo trade, JGB futures are weaker, closing -8 compared to settlement levels, after US tsys US tsys finished 4-5bps cheaper ahead of supply. There were few other catalysts in a generally subdued start to a holiday-shortened week.

• US bonds were heavy amid anxiety over the FOMC's policy path with the risk the Fed does not cut rates the 3 times projected by the dots this year.
• Comments from Fed Bostic supported that chance too, as he revised his outlook for only 1 easing, versus 2 previously. While Fed Cook said officials must cautiously balance the risk of easing monetary policy too much or too soon, allowing inflation to linger above target, and taking too long to ease, which could harm the economy needlessly and deprive people of economic opportunities.
• There was little reaction to lower than expected New Home Sales at 662k vs. 675k est (prior up-revised to 664k from 661k), MoM -0.3% vs. 2.1% est (prior up-revised to 1.7% from 1.5%).
• US-JP yield differentials have pushed higher but remain off 2024 highs (10yr spread last around +351bps).
• Locally today we have the Feb PPI services on tap, along with final Feb machine tool orders. The PPI is projected at 2.1% y/y, unchanged from Jan.