Richer In Post-Tokyo Trade Ahead Of Weekend, US Tsys Rally After Weaker Than Expected Data

In post-Tokyo trade ahead of the weekend, JGB futures were richer, closing +20 compared to settlement levels. US tsys rallied after weaker-than-expected data proved supportive of looser policy: lower than expected ISM Mfg (47.8 vs. 49.5 est), Prices Paid (52.5 vs. 53.2 est) and New Orders (49.2 vs. 52.7 est); as well as U. of Mich. Sentiment (76.9 vs. 79.6 est).

• The US 2-year yield declined 9bps to 4.53% and the 10-year slid 7bps to 4.18%. Those were the lowest yields since February 12 (closing basis).
• US data resumes on Tuesday with S&P Global US Services PMI, ISM Services, Factory and Durable Goods Orders.
• Elsewhere this week, the BoC is widely expected to keep rates on hold at 5% on Wednesday after it crucially removed a line on being prepared to raise rates further if needed at its January meeting. The ECB is also expected to hold its cash rate steady at 4.5% on Thursday. Eurozone core inflation fell to 3.1% on Friday, a seventh successive monthly fall.
• (Bloomberg) -- The Japanese government is discussing officially stating that the country’s economy has overcome deflation, Kyodo reported Saturday, citing several unidentified people familiar with the matter. (See link)
• Today, the local calendar sees Capital Spending, Company Profits and Monetary Base data, along with BoJ Rinban operations covering 1-3-year and 10-25-year+ JGBs.