MNI EUROPEAN OPEN: Japan & Aust PMIs Improve Ahead Of Key EU/US Releases

US TSYS: Tsys Futures Steady Ahead Of Jackson Hole & Jobless Claims

• Treasury futures opened the session lower, with the 10yr testing pre-BLS levels before risk markets, lead by tech stocks saw some selling pressure. TYU4 is now back at opening levels at 113-24, while TUU4 is trading at103-11+.
• The market will now turn its focus to US Jobless claims, Jackson Hole Headlines, while BoJ's Ueda is to speak tomorrow with any hawkish comments likely to cause heightened volatility.
• Cash treasuries are trading little changed today with yields flat to 0.5bps lower. The 10yr is trading 3.797% vs overnight & yearly lows of 3.7595%
• Projected rate cuts through year end gained vs. early Wednesday levels (*): Sep'24 cumulative -33.6bp (-33.3bp), Nov'24 cumulative -65.7bp (-64.4bp), Dec'24 -101.3bp (-98.3bp).

JGBS: Steady Ahead Of BoJ Ueda’s Appearance In Parliament & Jackson Hole Symposium

JGB futures are weaker and near session cheaps, -12 compared to the settlement levels.

• Outside of the previously outlined weekly International Investment Flow and Jibun Bank PMIs, there hasn't been much in the way of domestic drivers to flag.
• Machine Tool Orders data are due later alongside an Enhanced Liquidity Auction for 5-15.5-year OTR JGBs.
• Cash US tsys are flat to 1bp cheaper across benchmarks in today’s Asia-Pac session. The market’s focus now turns to advance PMIs and initial jobless claims later today, ahead of the Jackson Hole economic symposium, which will be held Aug. 22-24. Fed Chairman Powell will speak at 1000ET Friday morning.
• Cash JGBs are slightly mixed across benchmarks, with yield swings bounded by +/- 1bp. The benchmark 10-year yield is 0.2bp lower at 0.879% versus the cycle high of 1.108%.
• Swaps are flat to 1bp higher across the curve.
• Tomorrow, the local calendar will see National CPI and Department Sales data.
• BoJ Governor Ueda is scheduled to respond to questions from lawmakers in the lower house of parliament from 0930 JT tomorrow, followed by another session in the upper house starting at 1 p.m. Each session is set to last two and a half hours.

AUSSIE BONDS: Subdued Session As Jackson Hole Vigil Continues

ACGBs (YM +1.0 & XM +0.5) are slightly stronger on a data-light session.

• Outside of the previously outlined Judo Bank PMIs, there hasn't been much in the way of domestic drivers to flag.
• Cash US tsys are little changed across benchmarks in today’s Asia-Pac session. The market’s focus now turns to advance PMIs and initial jobless claims later today, ahead of the Jackson Hole economic symposium, which will be held Aug. 22-24. Fed Chairman Powell will speak at 1000ET Friday morning.
• Cash ACGBs are flat to 2bps richer, with a steeper 3/10 curve and the AU-US 10-year yield differential at +9bps.
• Swap rates are 1-2bps lower, with the 3s10s curve steeper.
• The bills strip shows pricing flat to +3.
• RBA-dated OIS pricing is flat to 2bps softer across meetings. A cumulative 21bps of easing is priced by year-end.
• Tomorrow, the local calendar is empty apart from the AOFM’s planned sale of A$700mn of the 2.75% 21 November 2028 bond.
• CPI Monthly data for July will be released next Wednesday.

NZGBS: Cheaper, $-Bloc Underperformance Continues, Q2 Real Retail Sales Tomorrow

NZGBs closed slightly weaker, with benchmark yields rising by 1bp. Despite narrow trading ranges during a data-light session, NZGBs ended the day at their lows.

• Additionally, NZGBs continued to underperform relative to their $-bloc counterparts, with the NZ-US and NZ-AU 10-year yield differentials widening by 2bps.
• Today's performance suggests an ongoing reversal of much of the post-RBNZ rate cut rally. While the 2-year yield remains 12bps lower than pre-RBNZ levels, it has climbed 14bps since Friday’s close. Similarly, the 10-year yield is 4bps lower than pre-RBNZ levels but has risen 6bps since Friday.
• The weekly government bond tender was cancelled today as is standard practice given the bond syndication of the new May-36 earlier in the week.
• Swap rates are little changed.
• RBNZ dated OIS pricing is little changed. A cumulative 72bps of easing is priced by year-end.
• Tomorrow, the local calendar will see Q2 Retail Sales Ex Inflation data.
• Before then, the market will be focused on advance PMIs in Europe and the US and US initial jobless claims.

FOREX: Yen Crosses Weighed By Mixed Equity Trends, But Overall Ranges Tight

Overall G10 ranges have been tight in the part of Thursday trade. As has been the case this week the USD was softer in the first part of trade, but follow through hasn't been evident. The USD BBDXY index last near 1230.60, little changed for the session.

• Cross asset signals have lent some USD support, albeit at the margins. US equity futures sit modestly lower, while regional equities have been mixed (despite the positive cash lead from Wednesday offshore trade). US yields are close to flat at this stage, with aggregate swings modest after Wednesday's move lower at the front end.
• USD/JPY has seen some volatility, but has respected recent ranges. Dips sub 145.00 have been supported, while highs were at 145.64. The slight weaker equity tone has likely lent some support to yen on crosses this afternoon.
• AUD/USD and NZD/USD have both ticked lower. The A$ was last 0.6730/35, NZD is back to 0.6150. Commodities are mostly weaker at the margin, likely weighing on commodity FX.
• AUD/JPY has edged down to 97.60/65, with recent highs above 99.00 capping the pair.
• On the data front we had better preliminary PMIs out of Australia and Japan, but more so on the services side. Market sentiment wasn't moved.
• Coming up, US/European August flash PMIs as well as US jobless claims and Chicago & Kansas indices are out. Later the Jackson Hole Symposium starts but markets will be waiting for Fed Chair Powell’s speech on Friday. The ECB July meeting account is also published today.

ASIA STOCKS: Asian Equities Pare Gains As Investors Book Profits Ahead Of CB Speak

Asian equities opened stronger this morning following dovish signals from the FOMC minutes but later gave up most of their gains. The HSTech lost half of its early rally, and mainland China indexes edged lower. South Korea's Kospi slipped as the won weakened, influenced by a the BOK leaving rates unchanged and more dovish stance. Japanese equities remained narrowly mixed, retreating from their best levels. While the broader MSCI Asia Pacific Index initially rose by 0.4%, gains were tempered by declines in markets such as China, Indonesia, and Taiwan with investors booking profits on tech stocks. Traders are now focused on Jackson hole headlines, Jobless Claims while BoJ Ueda is to speak tomorrow.

• Japanese equities have given up most of the session gains, with tech stocks almost erasing all gains, as investors look to book profits, while the yen is trading back at 145.00. Earlier, Jibun Bank PMI rose to 53.0 for August, vs 52.5 prior. The Nikkei is up 0.10%, while the TOPIX is now down 0.25% after the TOPIX Banks Index fell about 1.50%.
• China & Hong Kong equities are swinging between losses and gains while property continues to struggle with major property benchmarks trading at or close to all time lows. Elsewhere China has launched an investigation into EU dairy imports in response to tariffs imposed on China's EV and Pork exports. The HSI is up 0.40%, HSTech is 0.80% higher, while in China the CSI 300 is down 0.13%, property indices are mixed with Mainland Property Index down 2.40% while the CSI 300 Real Estate Index is up 1.10%
• South Korean equities have given all gains made this morning with KOSPI now flat after Samsung dropped -0.40% & SK Hynix fell -0.70%, small-caps are underperforming with the KOSDAQ down 0.80%. Foreign investors have been slightly better sellers this morning, with most of the selling coming from tech names.
• Taiwanese equities have erased all gains with the Taiex now trading 0.50% lower, with banking and property sectors the worst performing following the central bank's request for lenders to reduce their concentration of real estate loans. The central bank's directive, aimed at improving credit resource management, triggered concerns over tighter financial conditions. TSMC is currently trading down 0.85% after initially opening 0.60% higher.
• Australian equities are slightly higher driven primarily by gains in mining and real estate stocks. The ASX200 index is on track for its longest winning streak since February 2015, and trades 0.25% higher today. New Zealand healthcare stocks are underperforming today with the NZX50 down 0.25%.
• Asian EM equities are mixed with Indonesia's JCI down 0.35%, Singapore's Straits Times down 0.35% while Thailand's SET is 0.05% higher, Philippine's PSEi is up 1.10% and Malaysia's KLCI is up 0.13%, India's Nifty 50 is 0.20% higher

OIL: Crude Still Under Downward Pressure Ahead Of PMIs & Jackson Hole

Oil prices are off today’s lows to be little changed as global demand worries continue to weigh on benchmarks. Brent is little changed at $76.02/bbl after a low of $75.77, key support is at $75.05. WTI is down 0.2% to $71.80 after a low of $71.58, briefly below the bear trigger at $71.67 again. Algorithmic selling has exacerbated downward pressures. If they continue, OPEC may abandon plans to reduce output cuts from October. The USD index is slightly higher.

• There was an 818k downward revision to US payrolls announced Wednesday and the FOMC July minutes signalled that it is looking at cutting rates at its September 18 meeting. These have added to market nerves regarding the strength of the US economy at a time of disappointing growth in China.
• Despite concerns over US demand, EIA data showed another crude drawdown of 4.65mn barrels last week, and gasoline stocks fell 1.61mn and distillate 3.3mn. Crude inventories are down 34.7mn barrels since the start of July to their lowest level since the end of January.
• There is no update on Gaza ceasefire negotiations.
• Later the Jackson Hole Symposium starts but markets will be waiting for Fed Chair Powell’s speech on Friday. The ECB July meeting account is published today and US/European August flash PMIs as well as US jobless claims and Chicago & Kansas indices are out.

GOLD: Weaker Despite Dovish FOMC Minutes

Gold is 0.4% lower in today’s Asia-Pac session, after closing broadly unchanged at $2512.56 on Wednesday.

• Expectations for the FOMC to begin easing policy on September 18 were reinforced by the BLS's downward revisions to nonfarm payrolls and dovish FOMC minutes. Lower rates are typically positive for gold, which doesn’t pay interest.
• The Bureau of Labor Statistics reported that US payroll growth in the year to March was preliminarily revised down by 818k or 68k per month.
• The July FOMC minutes signaled that participants were eyeing a cut in September, with "several" seeing it as "plausible" to cut already in July. There weren't many clues in the minutes on future monetary policy beyond that, with no mention of a potential >25bp cut.
• Focus turns to the KC Fed-hosted Jackson Hole economic symposium will be held Aug. 22-24, with Fed Chairman Powell speaking at 1000ET Friday morning.
• According to MNI’s technicals team, conditions remain bullish for the yellow metal after delivering an all-time high on Tuesday. Note that moving average studies remain in a bull-mode set-up and this continues to highlight a dominant uptrend. The focus is on a climb towards $2536.4 next, a Fibonacci projection.