Futures Weaker With Push Higher In Global Bond Yields

In post-Tokyo trade, JGB futures are cheaper, closing -17 compared to settlement levels, after US tsys finished 2-12bps cheaper across the major benchmarks, with the curve steeper. US tsy yields climbed to new cycle highs across most maturities, with the 10-year printing a high at 4.5457% before marginally paring gains. The 30-year yield reached its highest since 2011 (4.6698%). The recent climb in oil prices combined with the Fed’s higher-for-longer message from last week and concerns over the US fiscal deficit weighed on US tsys.

• The 2s10s yield curve steepened by 8bps, reaching its steepest point in four months at a level of minus 60bps. This contrasts with the low of minus 108 bps recorded back in early July.
• There was little reaction to the latest round of US data as the Chicago Fed Act. Index and Dallas Fed Mfg Activity Index were both weaker than forecast. Chicago Fed President Goolsbee said US rates were at their peak and the debate would soon shift to how long they'll hold there.
• A US government shutdown would have negative implications for its credit assessment as it would highlight the weakness of US institutional and governance strength compared to its peers, Moody’s said.
• Germany’s 10-year rate was also up 6bps to a fresh 12-year high of 2.80%.
• Today the local calendar sees PPI Services data, along with 40-year supply.