Post-NFP Musings Handicap Core FI, Holidays Limit Activity

The impression left by the upbeat U.S. NFP report released Friday continued to reverberate around the markets, with activity limited by market holidays in Japan and Singapore. Resultant speculation surrounding prospects for sooner Fed taper applied some modest pressure to T-Notes in early trade, with the contract staging a round trip from its lowest point since Jul 19. Its oscillations occurred within a fairly narrow 0-04 range and T-Notes stabilised later in the session, as the post-NFP impetus petered out. TYU1 last seen -0-03 at 133-29, which represents the midpoint of the intraday range. Eurodollars last trade unch. to -1.0 tick through the reds. Cash Tsys are closed until the London open, owing to the market closure in Tokyo.

• ACGBs faltered at the reopen, as the space played catch up with post-NFP moves in U.S. Tsys. They held narrow ranges following that softer reopen, with bear steepening still evident in cash ACGB curve. Aussie participants weighed strong U.S. jobs data against a softer commodity complex, with gold, oil and iron ore all posting dips in early trade. The space looked through above-forecast Chinese inflation figures, which pushed CGB yields higher. The latest round of ACGB purchases from the RBA also went unnoticed, with the Reserve Bank offering to buy A$2.0bn of ACGBs with maturities of Nov '24 to May '28, but excluding ACGB Apr '27. Aussie bond futures remained rangebound, YM -3.0 & XM -4.0 at typing. Bills trade 1-4 ticks lower through the reds.