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Futures Weaker, Long-Dated US Tsys Push To Cycle Highs, Light Local Calendar

JGBS

In post-Tokyo trade, JGB futures are weaker, closing -13 compared to settlement levels, after US tsys continued to trade heavily. US tsys finished the NY session 6-11bp cheaper, with the belly underperforming, after a government shutdown was averted. The 2/10 curve dis-inverted further.

  • No delay in economic data this week after Congress passed a stopgap funding bill Saturday evening that will keep Federal agencies open through November 17, 2023.
  • US tsys extended lows after S&P Global US Manufacturing PMI came out higher than expected (49.8 vs. 48.9 est). Fast two-way trade was noted after ISM data.
  • ISM manufacturing data was mixed, with the headline index coming out higher than expected (49.0 vs. 47.8 est) but Prices Paid lower than expected (43.8 vs. 48.8 est). Employment (51.2 vs. 48.5 prior) and New Orders (49.2 vs. 46.8 prior) were higher.
  • Limited US data releases on Tuesday, with the focus on ADP on Wednesday ahead of Friday's September Jobs data.
  • Today the local calendar is light, with Monetary Base data as the only release. However, the MoF plans to sell Y2.7tn of 10-year JGBs.

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