TAIWAN:  GDP Expands Faster than Expected.

ACGBs (YM +3.0 & XM +4.5) are stronger after a flight to safety drove US tsys richer with the markets monitoring Israel's invasion of Southern Lebanon and Iran's missile attack on Israel. The cash tsys curve bull-flattened, with yields trading 3-5bps lower. 

• US job openings unexpectedly increased in August after two straight monthly decreases, but hiring was soft and consistent with a slowing labour market.
• The ISM’s manufacturing employment measure dropped to 43.9 from 46.0 in August. Its measure of prices paid by manufacturers decreased to 48.3, the lowest level since December 2023, from 54.0 in August.
• (AFR) "Debt hits seven-year low before decade of deficits Federal government net debt has fallen to its lowest level since 2017, but economists say the coming decade of deficits will send borrowing levels higher."
• Cash ACGBs are 3-4bps richer, with the AU-US 10-year yield differential at +23bps.
• The bills strip is richer, with pricing flat to +3.
• RBA-dated OIS pricing is slightly softer across meetings. Nevertheless, 2025 meetings are 2-3bps firmer than pre-RBA levels. A cumulative 13bps of easing is priced by year-end.
• Today, the local calendar is empty, apart from the AOFM’s planned sale of A$800mn of the 2.75% 21 June 2035 bond.

In local morning trade, NZGBs are 4-6bps richer after US tsys finished stronger with EGBs in response to Israel’s ground assault in southern Lebanon. The rally then extended as wires reported Iran had launched dozens of ballistic missiles at Israel. 

• However, US tsys finished off session bests as IDF officials reported "no additional threats" after the missile attack was largely intercepted in transit to Israel and Israelis were allowed to exit shelters. Iran's foreign minister stated on X that his country’s action is concluded unless Israel “decides to invite further retaliation.”
• Geopolitical risks overshadowed the day's ISM Mfg miss and higher-than-expected job openings data.
• The latest GDT auction saw the weighted average price for all milk products rise 3% to $3,851 per ton.
• Auckland's average house price fell by 2.4% in September to NZ$1,081,069, continuing declines from August and July, according to Barfoot & Thompson.
• Swap rates are
• RBNZ dated OIS pricing 1-5bps softer across meetings, with 44bps or a 76% chance of a 50bp cut next week. The market is pricing in 92bps of cuts now by November.
• The calendar is light for the remainder of the week, with just ANZ Commodity prices tomorrow.

• RES 3: 149.55 - High Mar 22 (cont)
• RES 2: 147.74 - High Jan 15 and bull trigger (cont)  
• RES 1: 146.53 - High Aug 6 
• PRICE: 144.96 @ 16:04 BST Oct 01
• SUP 1: 143.57 - Jul 17 high
• SUP 2: 142.23 - Low Jul 02
• SUP 3: 140.21 - 1.236 proj of Mar 22 - Nov 1 ‘23 - Jan 15 price swing    

The bullish outlook for JGBs was dealt a blow last Friday as Ishiba was confirmed as LDP leader and de facto Japanese Prime Minister. As a result, JGBs slipped sharply to pullback lows of 144.480 - however the low is still clear of next support at 143.57. Additionally, moving average studies on the continuation chart are in a bull-mode position, highlighting a clear uptrend. A continuation higher would open 146.53, the Aug 6 high(cont) and a bull trigger.