ASIA: Government Bond Issuance Today.

USD/JPY intra session lows from Monday came in close to 151.50, but we track near 152.10/15 in early Tuesday dealings. Yen is around 0.60% stronger for Monday's session, the second best performer in the G10 space. Broader USD sentiment was softer, the BBDXY last near 1258.55, off 0.40%, but above intra-session lows of 1254.85 from Monday. 

• For USD/JPY techs, the Oct 25 low at 151.46 remains intact. On the topside we have the Oct 28 high at 153.88. These will be near term levels to watch as we approach US election results tomorrow morning Asia Pac time (if we don't breach before hand). Note the 20-day EMA is at 150.73.
• US-JP yield differentials sit off highs, particularly at the back end, as US 10yr yields fell close to 10bps in Monday trade. Caution entered the market as opinion polls show a very tight US election race, particularly in the swing states.
• There were modest losses for both EU and US equities, another yen positive, although CHF was the best G10 performer, up nearly 0.70%.
• Today Japan markets return after yesterday's holiday. On the data front, we have Oct monetary base figures, not a market mover. Opinion polls for the Ishiba administration continue to deteriorate.
• Note the following expiries for in the option space for NY cut later: Y152.00($826mln), Y152.50($1.0bln), Y153.20-25($621mln), Y153.65($751mln). 

European LNG prices rose 3.4% on Monday to EUR 40.52 as demand rose due to a drop in wind-generated power, which is expected to continue this week. It was also supported by positive sentiment for energy after OPEC delayed its gradual normalisation of oil output. 

• European storage is high at above 95% full and while imports have been lower for this time of year, they continue to arrive from the US, Qatar and North Africa, according to Italy’s Eni SpA. There are still risks around year-end when an agreement for Russian gas to flow through Ukraine expires but talks are progressing with Azerbaijan as an alternative route.
• If Iran follows through on its plan of a “strong and complex” strike on Israel, then its oil facilities may become targets. It would also heighten the risk to the Strait of Hormuz and Qatar’s LNG shipments.
• US natural gas rose 4.7% to $2.79 as October’s sharp fall in prices encouraged buyers into the market.
• Warmer weather has weighed on prices in the US, but Tropical Storm Rafael has the potential to disrupt oil and gas production in the western Gulf of Mexico, according to Bloomberg. Forecasts for mid-November in western and central US are for lower temperatures, while the east stays above average, according to Commodity Weather Group. 

In local morning trade, NZGBs are 1bp cheaper despite a strong rally by US tsys ahead of today’s US Presidential Election. The US 10-year yield dropped 9bps to 4.29% while the 2-year finished 4bps lower.

• “Households have reduced their discretionary spending and businesses have put investment plans on hold,” the RBNZ said in its semi-annual Financial Stability Report published today. “While business confidence is recovering as inflation and interest rates fall, significant further weakening in the economy remains a risk.”
• Swap rates are 1-2bps higher, with the 2s10s curve flatter.
• RBNZ dated OIS pricing is flat to 2bps firmer for 2025 meetings. A cumulative 97bps of easing is priced by February, with 56bps by year-end.
• Today, the RBA will announce its policy decision. While the cash rate is unanimously expected to remain at 4.35%, the meeting statement will be closely analysed for any shifts in tone. A dovish interpretation may arise if the forecasts suggest that underlying inflation could hit the target sooner than the current expectation of Q4 2025.
• Looking further ahead, the FOMC decision is unusually on Thursday amid an otherwise light US economic calendar.