BUND TECHS: (M6) Gains Appear Corrective

US bond futures brushed off the moves in JGBs today to move only modestly lower.  The 10-Yr is down -03+ today at 112 with reasonably strong volumes.  Given the volumes and the limited price movement in TYH6, it suggests that decent two way flow occurred, likely hedging related.  This leaves TYH6 near to its downside resistance via the 200-day EMA of 111-31+. 

Cash was more active with yields up +0.6bps to +1.8bps, with the long end under performing.  

• The 2-Yr was up +0.6bps to 3.508%
• The 5-Yr was up +1bps to 3.771%
• The 10-Yr was up +1.4bps to 4.224%
• The 30-Yr was up +1.5bps to 4.868%

USTs will likely trend in tight ranges ahead of NFP  with the 10-Yr near to  4.20 -4.25%.  Wednesday's US January Labour Market Report is forecast at 70k for a slight acceleration from the 50k in December and 56k in November. The market likely currently views that to be on the high side considering a swathe of soft labor indicators this past week. If accurate, it would see another month that implies roughly zero payrolls growth when extrapolating expected downward revisions.

Looking ahead to Monday in the US, there is a US$89bn 13-week and a US$77bn 26-week auction.

• The Nikkei 225 hit a new all-time high, jumping nearly 5% and above 57,000 as investors reacted to PM Takaichi’s Liberal Democratic Party (LDP) securing a historic super-majority, which signals a stable fiscal policy runway through 2028 and aggressive stimulus for AI and semiconductors.  One of Japan's key AI stocks Softbank Group jumped +7.30% today - giving regional AI / tech stocks a boost.  Unsurprisingly the KOSPI is up strongly Monday with gains of +3.9% with SK Hynix up +2.5% and Samsung +3.3%.  Taiwan's TAIEX is up +2.3% as TSMC joined in the regional rally with gains of +2.2%.
• With no new news out of the US Iran talks as the Iran foreign minister described the talks as a 'step forward', the perceived de-escalation for now fed into over risk sentiment in the region.  All major bourses moved higher with the SE Thai up +3.3%primarily due to the decisive victory of the conservative Bhumjaithai Party (BJT) in the weekend general election, which has provided investors with much-needed policy continuity and political stability.  This flowed through to regional trends with the FTSE Malay up +0.8% and the JCI up +0.95%.  
• China's bourses didn't escape the improvement in risk sentiment with the tech heavy Shenzhen Comp up +1.7% whilst the Hang Seng was up +1.4% with tech stocks leading.  A trading debut for Montage Tech (a chip manufacturer) saw the price surge +50% on its trading debut
• Looking ahead sentiment will rest on US Iran talks, with Trump set to meeting Israel PM Wednesday.  This meeting is expected to set the tone for the next discussions. 

Economists and advisors share their outlook on China's GDP growth target.  On MNI Policy MainWire now, for more details please contact sales@marketnews.com.