AUSTRALIA DATA: Mixed November Jobs Data, More Information Needed

Following the weak lead in overnight, US treasury futures are hardly moving in this morning's trade with the 10-Yr future down -01+.  At 112-20+ TYZ5 remains at the mid-point between the 50-day and 100-day EMA, looking for the next catalyst.  With data releases delayed, the focus remains on the news flow on talks to end the US shutdown.  

Cash is barely changed from the weak lead in, with yields relatively unchanged to 0.5bps lower from where the US closed. 

• The US 2-Yr is at 3.59%
• The US 5-Yr is at 3.715%
• The US 10-Yr is at 4.118%
• The US 30-Yr is at 4.706% 

Equity markets across the region are strong with the KOSPI and Hang Seng leading the rally.  

The next focus for bond markets will be the US$42bn 10-Yr auction on the 13th, followed by the US$25bn 30-Yr auction on the 14th.  

The Russell 2000 overnight range was 2440.33 - 2468.88, closing +0.94%. The Russell 2000 had a good bounce higher on its open as it was dragged by risk surging across the board. The price action though bullish would have disappointed longs in that it was a alot smaller than the moves seen in the S&P and Nasdaq. The key area for the bulls remains the pivotal support between 2380-2400, while this area holds the bulls will be hoping that risk can build on this change in sentiment and challenge the year's highs in an end of year “Santa Rally”.

• Zerohedge is reporting on X that, “Goldman Flow Gurus Say 'Santa Rally Still On For This Year', the 'Wobble' Is Over.”

Fig 1: Russell 2000 Dailly Chart

Source: MNI - Market News/Bloomberg Finance L.P

In Tokyo morning trade, JGB futures are stronger, +8 compared to settlement levels.

• Japan’s current-account balance is a surplus of 4.48t yen in September, compared with the median estimate of a surplus 2.46t yen.
• Cash JGBs are 1bp cheaper to 1bp richer across benchmarks, with a steepening bias. The benchmark 30-year yield is 0.6bp higher at 3.147%, 20-25bps below its cyclical high. (see chart)
• “The 30-year bond auction doesn’t come at an ideal time, given the government is expected to announce a new economic stimulus package, and there’s speculation around the size of the supplementary budget, which could potentially increase JGB issuance, says Keiko Onogi, senior JGB strategist at Daiwa Securities”. - via BBG
• The previous 30-year JGB auction delivered mixed results. The low price fell short of dealer expectations of 99.15, per the Bloomberg survey. However, the cover ratio increased to 3.4110x from 3.30806x. On the other hand, the auction tail shortened significantly to 0.17 from 0.18, indicating an improvement in bidding strength.
• The 2/30 curve remains within its well-established range ahead of today's supply. 

Source: Bloomberg Finance LP