EM ASIA CREDIT: MNI EM Credit Overnight – CEEMEA & LATAM

The WSJ reported earlier that US Tsy Secretary Bessent will reportedly start Fed Chair Interviews this Friday. 

•  It notes: "There are 11 contenders for the job, according to Bessent and his advisers. Among them are Fed governors Christopher Waller and Michelle Bowman, National Economic Council Director Kevin Hassett and former Fed governor Kevin Warsh. Following the interviews, Bessent plans to recommend a final list of candidates to President Trump." per WSJ

TYZ5 is trading 112-07, up 0-02+ from its close. 

• The US 2-year yield opens around 3.643%.
• The US 10-year yield opens around 4.267%, up 0.1 from its close.
• MNI US: Implied Probability Of Govt Shutdown Ticks Over 50% As Schumer Digs In. Political betting markets upgraded the risk of a government shutdown in 2025 after Senate Minority Leader Chuck Schumer (D-NY) issued a 'letter to colleagues' this morning taking a hard line on President Trump's decision to use a 'pocket rescission' to unilaterally cancel roughly USD$5 billion in Congressionally appropriated funding.
• MNI US DATA: ISM Manufacturing Improves On New Orders, But Tariffs Still Taking Toll. August's ISM Manufacturing report was weaker than expected on the headline figure, with some sub-components telling a slightly more mixed story, and price pressures unexpectedly diminished. Overall the ISM survey continues to portray a manufacturing sector that is failing to convincingly regain traction after the summer's tariff-related policy uncertainty.
• 10-Year Yields continue to find supply toward the 4.20% area, which signals the range might continue to dominate. The price action in the long-end looks pretty dire, the 4.35/4.40% area needs to hold for the longs to remain in control.
• Data/Events: MBA Mortgage Applications, Wards total Vehicle Sales, JOLTS, Factory Orders, Durable Goods Orders, Fed Beige Book

JGB futures finished up post Tokyo trade at 137.30 on Tuesday, -.22 versus settlement levels. Global back end futures were weaker on Tuesday amid on-going fiscal concerns, while fresh political uncertainty in Japan was another headwind for local futures. 

• From a technical standpoint, a bear threat in JGB futures remains present and the contract is trading closer to its recent lows. A resumption of weakness would signal scope for an extension towards 136.57, a Fibonacci projection.
• Late yesterday, via BBG: "Japanese Prime Minister Shigeru Ishiba’s key power broker within the ruling party said he’ll quit if Ishiba approves, weakening Ishiba’s standing within his party and possibly starting a string of resignations at risk of reaching the prime minister himself."
• Fresh fiscal uncertainty will likely bias the JGB curve steeper. The 2/30s curve ended yesterday near +236bps. The outright 10yr JGB yield ended at 1.62% yesterday.
• In the swap space, the 10yr rate was last near 1.445%.
• On the data front today, we just have August final reads for the services and composite PMI prints.
• Note tomorrow sees a 30yr debt sale, another test for sentiment, after yesterday's 10yr sale went smoothly.