Stronger Than Expected US Payrolls Leaves US Tsys & JGB Futures Cheaper on Friday

In post-Tokyo trade ahead of the weekend, JGB futures were sharply weaker, closing at -46 compared to settlement levels, after US tsys gapped lower after a broadly higher-than-expected Change in Nonfarm Payrolls of +353k vs 185k est (prior up-revised to 333k from 216k) and Unemployment Rate 3.7% vs. 3.8% est. Futures continued to extend lows after U. of Mich. Sentiment (79.0 vs 78.9 est) and Factory/Durable goods data.

• The 2-year US tsy yield shunted 16bps higher to 4.36%, with the 10-year yield increasing by 14bps to 4.02%, marking a sharp reversal from the 2024 low of 3.81%, seen in the lead-up to the FOMC.
• The implied probability of a 25bp rate cut in March has been scaled back to around 20%.
• A Reminder that Fed President Powell will be speaking on 60 Minutes at the top of the hour.
• US Data Tonight: ISM Non-Manufacturing, PMI while Atlanta Fed's Raphael Bostic speaks.
• Today, the local calendar sees Jibun Bank PMI Services & Composite and 10-year linkers supply, ahead of Labour and Real Cash Earnings on Tuesday.