Light Bid After Abe Shot, Little Conviction Ahead Of NFPs

TYU2 sits +0-08+ at 118-17, 0-03 off the peak of its overnight high, running on volume of ~100K within a 0-12 range. Meanwhile, cash Tsys sit 1.0-2.5bp richer across the curve at typing, with the belly leading the bid.

• Tsys have seen a light bid during the Asia-Pac session, with the shooting and subsequent hospitalisation of former Japanese PM Abe creating some light risk-off price action. Note that the more important factor for markets may be whether the incident results in the reduction of Abe’s influence within the wider Japanese policymaking sphere e.g. expediting potential changes to Japan’s defence and monetary policy stance.
• Outside of that, the space meandered through early Asia trade, with a lack of real conviction ahead of today’s NFP release (please see our full preview of that release here)
• We have noted elsewhere that the impaired market liquidity and apparent lack of conviction evident among some risk takers (as evidenced by a couple of recent sell-side surveys) could make for an interesting round of post-NFP price action. An idea that is probably compounded by the Fed’s focus on suppressing inflation even if it comes at the expense of economic growth, which limits the read-through of today’s payrolls release when it comes to wider market pricing of future Fed policy.
• On top of the NFP print Friday will bring the latest round of comments from NY Fed President Williams (permanent voter).