Richer, US Tsys Twist-Flatten, US Non-Farm Payrolls Tonight

ACGBs (YM +3.0 & XM +7.5) are richer after US tsys exhibited a twist-flattening during the NY session, with yields 5bps higher to 13bps lower. Notably, the 10-year yield experienced an 8bp drop, closing at 4.66%. This marks a cumulative decrease of 36bps since it reached its highest level since 2007 last week, peaking at 5.02%. The market now looks ahead to Non-Farm Payrolls data this evening.

• Cash tsys are closed in Asia due to the observance of a national holiday in Japan.
• The extension of the post-FOMC rally was assisted by lower-than-expected Unit Labor Costs (-0.8% vs. 0.3% est, 2.2% prior) and higher-than-expected Jobless Initial Claims (217k vs. 210k est, 210k prior).
• The BOE left policy unchanged at 5.25% for the second consecutive month which was in line with expectations.
• Cash ACGBs are 4-8bps richer, with the AU-US 10-year yield differential 2bps lower at +4bps.
• Swap rates are 3-7bps lower, with the 3s10s curve flatter.
• The bills strip is slightly richer, with pricing +1 to +2.
• RBA-dated OIS pricing is 1-2bps softer across meetings, with terminal rate expectations at 4.46% (+39bps).
• Judo Bank Services and Composite PMIs were slightly higher at 47.9 and 47.6 respectively versus 47.6 and 47.3 prior. Q3 Retail Sales Ex Inflation data is due later today.