Inflation Worry, Post-NFP Impetus Keep Core FI Heavy

Participants looked through tensions across tensions across the Taiwan Strait as the new week got under way, focusing on the global economic outlook instead. T-Notes remained heavy and extended post-NFP losses, as the latest U.S. jobs report showed that wages rose faster than expected despite a considerable miss in headline NFP growth. The report was assessed amid the ongoing energy crunch, which adds fuel to inflation expectations.

• T-Notes pierced the 131-00 figure and retreated to a fresh four-month low of 130-25+. The contract last sits -0-10 at 130-26+, hovering just above session lows. Eurodollars last seen unch. to -4.5 ticks through the reds. Cash Tsys are closed owing to a market holiday in the U.S. but local CPI data & FOMC minutes are eyed later this week.
• JGB futures ebbed lower to fresh cycle lows, last trade at 151.23, 9 ticks shy of the previous settlement. The contract slipped amid an upswing in the Nikkei 225, which was bolstered by PM Kishida's comment that he was not planning a capital-gains hike, even as one of his allies recently advocated raising the levy. The Premier will take questions from lawmakers re: his first policy speech today. Cash JGB yields are little changed as we type.
• Australia's 3-Year yield topped 0.500% for the first time since March 2020. Cash ACGB curve bear steepened, with yields last seen -0.3bp to +7.2bp (10s underperform). YM reopened on a softer footing and held below neutral levels, it last sits -4.5; XM lost ground and trades -7.5 at typing. Bills trade 2-5 ticks lower through the reds. Local headline flow lacked notable catalysts, with the expected Sydney reopening coming to fruition. The RBA offered to buy A$1.6bn of ACGBs with maturities of Nov '24 to Nov '28, but excluding ACGB Apr '26.