CNH: Outperforms USD Index Gains, CNH/JPY Uptrend Intact

In post-Tokyo trade on Friday, JGB futures closed stronger, +7 compared to settlement levels, despite US tsys finishing the Friday session slightly cheaper.

• Fed speakers returned from media blackout after Wednesday's 25bp rate cut: New Fed Governor Miran confirms in a CNBC appearance that he was the bottom dot on the new Dot Plot that saw rates ending the year at 2.75-3.00% (implying a total of 150bp of cuts going into the September meeting).
• MNI BOJ WATCH: Ueda Says Rate Hikes Will Come; No Timing Hints. Bank of Japan Governor Kazuo Ueda insisted that rate hikes remain in prospect but provided no further hints as to timing on Friday after the BOJ voted to keep the policy rate unchanged at 0.5% with two dissenters calling for a 25-basis-point hike.
• * When asked about the gap between his views and those of the two dissenters, Ueda noted that underlying CPI inflation is approaching 2% but is still below it. The more difficult environment for exporters may also apply downward pressure to Japan's economy and on inflation.
• * Bloomberg - "Shinjiro Koizumi, vying for the top position in Japan's ruling party, pledged to take steps to immediately counter inflation and boost wages. He won't call a snap election if he wins, Kyodo reported."
• Today, the local calendar will be empty. 

ACGBs (YM -2.0 & XM -2.5) are modestly cheaper after US tsys posted a second straight session of losses following the Fed's easing. The less than dovish guidance from the Fed, technicals, risk -on, supply including a potentially heavy corporate calendar ahead, and some concerns over Fed independence left Treasuries in the red. 

• Bloomberg - "New RBA Guidance Puts Aussie Banks on Track for 15% Profit Miss. Australian banks could miss fiscal 2026 consensus profit by up to 15%. given central bank guidance suggesting rates will be cut at least another three times. Swap rates are less of a tailwind, but wholesale funding headwinds are easing."
• Cash ACGBs are 2bps cheaper with the AU-US 10-year yield differential at +13bps.
• The bills strip is -1 to -3 across contracts.
• RBA-dated OIS pricing is giving a 25bp rate cut in September a 7% probability, with a cumulative 28bps of easing priced by year-end.
• Today, the local calendar will see RBA Governor Bullock appearing before the House of Representatives Standing Committee on Economics.  August CPI data is due on Wednesday.
• Next week, the AOFM plans to sell A$300mn of the 4.75% 21 June 2054 bond on Tuesday, A$1000mn of the 3.00% 21 November 2033 bond on Wednesday and A$900mn of the 2.75% 21 November 2029 bond on Friday.

In local morning trade, NZGBs are 1bp weaker after US tsys finished the Friday session slightly cheaper.

• Fed speakers returned from media blackout after Wednesday's 25bp rate cut: New Fed Governor Miran confirms in a CNBC appearance that he was the bottom dot on the new Dot Plot that saw rates ending the year at 2.75-3.00% (implying a total of 150bp of cuts going into the September meeting). SF Fed President Daly didn't reveal much about her current rate view in a Q&A at an AI conference. She's probably one of the members on the "median" of 3 cuts in the updated September Dot Plot, but doesn't vote in 2025 or 2026. Mn Fed Kashkari does "not believe we should be on a preset course for a series of rate cuts."
• (Bloomberg) -- There should be a "serious discussion" about reducing the Official Cash Rate to 2% from 3% currently, Kiwibank Chief Economist Jarrod Kerr told the Herald NOW news service.
• Swap rates are flat to 1bp higher.
• RBNZ dated OIS pricing is little changed across meetings. 33bps of easing is priced for October, with a cumulative 58bps by November 2025.
• The local calendar will be empty until Friday’s Consumer Confidence data.