US TSYS: Opened Little Changed After A Modest Cheapening Yesterday,

JGB futures finished Monday's post Tokyo close at 131.57, +.02 versus settlement levels. We may see a modestly positive re-open this morning, given a push higher in US Tsy futures (with some support in this space from US government shutdown odds), but JGB bulls may not get too excited until we breach back above 132.00. We couldn't do that yesterday despite a warning from Japan PM Takaichi around being ready to curb speculative moves in markets. On the downside, support has been evident for futures sub 131.20 recently. 

• In the cash JGB space, the 10yr ended close to 2.24% on Monday, unable to test under 2.205. The benchmark remains above key EMAs in yield terms, the 20 day close to 2.17%. The 20yr finished at 3.17%, down 2bps, but still above 20-day EMA support.
• The 2/10s curve is holding flatter at +97bps, while the 2/30s curve is around +236bps.
• Locally today we have the Dec PPI services print. A 2.7%y/y forecast is projected (unchanged from Nov). Later on the final Dec machine toll orders outcome is due.
• Note tomorrow the 40yr debt sale is due. 

Bond futures finished ahead in the US trading day despite stronger equities as a better than expected 2-Yr auction drove sentiment.  The 10-Yr future closed up +05 at 111-26+ , but still below all major moving averages.  The demand for bonds saw the 2-Yr auction demand stronger and resulting in the yield below initial pricing.  Futures have opened flat at 111-26 in Asia today 

Cash was stronger across the curve with the long end outperforming and has recovered from the JGB sell off from last week. 

• The 2-Yr finished down -0.4bps at 3.592%
• The 5-Yr was down -0.3bps at 3.823%
• The 10-Yr was down -1.2bps at 4.215%
• The 30-yr was down -2.5bps at 4.803%

The Texas Manufacturing Outlook Survey produced by the Dallas Fed shows a much stronger improvement in January than expected, the latest piece of data indicating a pickup in manufacturing activity to start the year as Durable Goods November Preliminary was ahead of expectations at 5.3% vs exp. 4.0% and prior of -2.1%

See our Fed Preview Here MNI FED WATCH: Holding Steady With Rates Near Neutral

January 2026 FOMC Analyst Views: See You In March  < Fed_Prev_Jan2026_With_Analysts_22448bf33a.pdf >

Projected rate cut pricing largely steady vs. late Friday levels (*): Jan'26 at -0.7bp, Mar'26 at -4.2bp, Apr'26 at -7.7bp (-8.2bp), Jun'26 at -19.2bp (-18.7bp), first full cut priced in at Jul'26: -26.7bp (-25.2bp).

• RES 3: 95.982 - 76.4% retracement Sep’24 - Nov’24 downleg
• RES 2: 95.960 - High Apr 7 (cont.)
• RES 1: 95.900 - High Oct 17
• PRICE: 95.155 @ 15:55 GMT Jan 26
• SUP 1: 95.103 - 2.0% Lower Bollinger Band
• SUP 2: 95.100 - Low Jan 23
• SUP 3: 94.248 - 1.0% 10-dma envelope

Aussie 10-yr futures remain under pressure, with the jobs data print adding to the downside argument. This puts prices still south of all major support levels. With 95.275 cleared, prices are pushing to new contract lows, opening vol-band support through 95.103 and into 94.248. Any recoveries need to break back above 95.900 to signal near-term bullish traction.