US TSY FUTURES: Huge Treasury 5s10s Inter-Commodity Spread

• USDJPY was well supported Friday as markets focussed on the above-estimate headline change in NFP and the sizeable beat for average hourly earnings growth in the US. The Fed’s Harker subsequently said he sees steadiness in 'solid' latest job data.
• Fresh weekly highs for USDJPY ensued, with the pair rallying as high as 145.09 and essentially matching the initial target of the 50-day EMA. Broader dollar weakness to start this week briefly tipped the pair back below 144.00, however, the ongoing cautious optimism surrounding potential progress for US/China trade talks have seen the pair edge higher to 144.50 in most recent trade. 142.12, the May 27 low, remains the important support.
• Notably, MUFG see the current USDJPY levels post-NFP data as close to peaking with scope building for another sustained move back toward the 140.00-level. They see the BoJ as likely turning more hawkish if global financial market conditions remain more favourable after the notable improvement following the de-escalation of trade tensions.
• MUFG highlight the inflation backdrop is increasingly likely to prompt a hawkish shift in BOJ policy. They add the BoJ will also not want to see JPY depreciation given the risks of an FX move feeding further super-long JGB instability that in turn would lead to possible complaints by the US. 

Late on Friday J.P.Morgan recommended initiating maturity-matched 3.875% Feb 2043/3% Feb 2049 swap spread curve flatteners (0.8/1 weighted)

• This is a micro RV play, as they noted that “the maturity-matched swap spreads between the 3.875% Feb 2043 and the 3% Feb 2049 issues are well (and positively) correlated but currently appear mispriced by about 2bp”.

• Secured Overnight Financing Rate (SOFR): 4.29% (+0.00), volume: $2.667T
• Broad General Collateral Rate (BGCR): 4.27% (+0.00), volume: $1.072T
• Tri-Party General Collateral Rate (TCR): 4.27% (+0.00), volume: $1.043T
• (rate, volume levels reflect prior session)