EM ASIA CREDIT: POSCO Holdings: Steel sector update

In post-Tokyo trade, JGB futures closed slightly higher, +5 compared to settlement levels, after US tsy after US tsys finished the NY session with modest gains. 

• Lower-than-expected building permits outweighed higher-than-expected housing starts, while softer Canadian CPI aggregates added to support.
• Canadian all-items CPI rose 1.73% Y/Y unrounded (1.86% prior, 1.8% expected by MNI median), and 0.12% M/M (0.18% prior, 0.4% expected).
• (Bloomberg) - "Japan's 20-year government bond auction drew demand that was weaker than its 12-month average, reflecting investor caution about longer-dated debt facing fiscal risks."
• "The collapse in the yen's linkage to interest-rate differentials over the last year is the largest among all Group-of-10 currencies, according to Goldman Sachs analysts who argue that the end of the Bank of Japan's yield-curve control program early last year explains the waning sensitivity to spreads." - BBG
• (Bloomberg) -- Treasuries broke a three-day slide as traders stuck with wagers on interest rate cuts as soon as next month, ahead of a speech from Federal Reserve Chair Jerome Powell.
• Today, the local calendar will see Trade Balance, Core Machine Orders and Tokyo Condominiums for Sale data.

ACGBs (YM +0.5 & XM +0.5) are little changed after US tsys finished the NY session with modest gains.

• Lower-than-expected build permits outweighed higher-than-expected housing starts, while softer Canadian CPI aggregates added to support.
• Housing starts were far stronger than expected in July at 1428k (saar, cons 1297k) after an upward revised 1358k (initial 1321k) in June. It left starts rising 5.2% M/M (cons -1.8%) after a stronger than first thought 5.9% (initial 4.6%) as they bounced after a -8.3% M/M decline in May (also revised from -9.7%).
• Canadian all-items CPI rose 1.73% Y/Y unrounded (1.86% prior, 1.8% expected by MNI median), and 0.12% M/M (0.18% prior, 0.4% expected).
• Cash ACGBs are 1bp richer with the AU-US 10-year yield differential at +1bp.
• The bills strip is little changed.
• RBA-dated OIS pricing is little changed across meetings today. A 25bp rate cut in September is given a 27% probability, with a cumulative 35bps of easing priced by year-end (based on an effective cash rate of 3.59%).
• Today, the local calendar will be empty.
• This week, the AOFM plans to sell A$1500mn of the 1.25% 21 May 2032 bond today and A$300mn of the 4.75% 21 June 2054 bond on Friday.

• MNI: UK MAY-JUL MEDIAN PAY AWARDS +3% :Brightmine