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In post-Tokyo trade on Friday, JGB futures closed weaker, -32 compared to settlement levels, after US tsys bear-steepened, with yields 2-5bps higher.

• While July retail sales appeared solid in our view (and led to a slight upgrade to the Atlanta Fed's GDPNow est for Q3), the August prelim UofM survey was decidedly stagflationary with weaker sentiment and higher inflation expectations, while industrial production was uninspiring and import price inflation was a little firmer than expected despite lower revisions.
• This week's US calendar includes residential sector data (housing starts, homebuilder sentiment, existing home sales) and flash August PMI data as well as a few Fed speakers (notably Waller and Bowman) ahead of Friday’s keynote speech by Fed Chair Powell as part of the annual Jackson Hole symposium Aug 21-23.
• (Bloomberg) -- "Japan, the European Union, and South Korea are waiting for the US to implement concessions on tariffs, with Japan's chief trade negotiator Ryosei Akazawa saying "the bleeding hasn't stopped" for the country's car industry."
• "Japan plans to tighten oversight of foreign workers with specialist expertise, after reports some are engaged in work not permitted by their visas, Kyodo said." – BBG
• Today, the local calendar will see the Tertiary Industry Index.

ACGBs (YM -3.5 & XM -4.5) are weaker after US tsys bear-steepened on Friday, with yields 2-5bps higher.

• There was no particular event or headline that stood out, but recent whiffs of stagflation (following on from Thursday's hot producer price report) and follow-through from European long-end weakness (partly on fiscal concerns) appeared to weigh.
• While July retail sales appeared solid in our view (and led to a slight upgrade to the Atlanta Fed's GDPNow est for Q3), the August prelim UofM survey was decidedly stagflationary with weaker sentiment and higher inflation expectations, while industrial production was uninspiring and import price inflation was a little firmer than expected despite lower revisions.
• Cash ACGBs are 3-4bps with the AU-US 10-year yield differential at -5bps.
• The bills are -1 to -4, with the strip steeper.
• RBA-dated OIS pricing is slightly firmer across meetings today. A 25bp rate cut in September is given a 28% probability, with a cumulative 36 bps of easing priced by year-end.
• The local calendar will be empty today, ahead of Westpac Consumer Confidence tomorrow.
• This week, the AOFM plans to sell A$1500mn of the 1.25% 21 May 2032 bond on Wednesday and A$300mn of the 4.75% 21 June 2054 bond on Friday.

In local morning trade, NZGBs are 1-2bps cheaper after US tsys bear-steepened on Friday, with yields 2-5bps higher.

• This week's calendar includes residential sector data (housing starts, homebuilder sentiment, existing home sales) and flash August PMI data as Friday’s keynote speech by Fed Chair Powell as part of the annual Jackson Hole symposium Aug 21-23.
• The July BNZ performance of services index rose to 48.9 in July from a revised 47.6 in June.
• The highlight of the week will be Wednesday’s RBNZ decision, where the MPC is likely to cut rates 25bp to 3% after pausing in July. It will also release updated forecasts, and Governor Hawkesby will hold a press conference. On Thursday, he will appear before a parliamentary committee to talk about the latest Monetary Policy Statement.
• Tuesday sees Q2 PPI output/input prices. They both rose strongly in Q1.
• July trade data print on Thursday. NZ has been running trade surpluses in recent months, helped by strong exports of primary produce and frontloading of exports to the US.
• Swap rates are 2bps higher.
• RBNZ dated OIS pricing is little changed across meetings. 23bps of easing is priced for this week, with a cumulative 42bps by November 2025.