Futures Weaker Overnight, But Core & Core-Core CPI Misses Estimates

In post-Tokyo trade, JGB futures are weaker, closing -5 compared to settlement levels, despite US tsys finishing 1-8bps richer across the major benchmarks. The US curve bull steepened. US tsys were briefly pressured after weekly claims were lower than forecast. However, GDP Price Index (1.7% vs. 2.0% est), Personal Consumption (0.8% vs. 1.7% est) and Pending Home Sales (-7.1% vs. -1.0% est) all printed lower than expected. The 10-year yield printed a fresh cycle high at 4.6861%, before finishing at 4.58% (-3bps).

• There was little reaction to the Fedspeak which crossed through the session. Fed Chair Powell did not make any market-moving statements at a teacher town hall event.
• Later today sees US consumer spending, wholesale inventories and University of Michigan consumer sentiment.
• Tokyo CPI prints a headline rate in August of 2.8% y/y versus 2.7% est. and 2.9% prior. Core and Core-Core both undershoot expectations printing respectively 2.5% y/y and 3.8% y/y versus 2.6% est. and 2.8% prior (Core) and 3.9% est. and 4.0% prior (Core-Core). This data should support the market in early Tokyo dealing.
• Jobless Rate shows 2.7% versus 2.6% est. and 2.7% prior. The Job-To-Applicant Ratio was unchanged at 1.29 in August.
• Today the local calendar also sees August Retail Sales, Industrial Production, Housing Starts and Consumer Confidence data.