OAT: UBS Recommend Long 30s

From ECB staff's latest bulletin titled "What does increasing competition from China mean for euro area employment?" (Link )

• "The rising competitiveness of Chinese exports poses significant challenges for euro area labour markets. While at the moment the impact is concentrated in sectors such as vehicles and chemicals, the broader implications might extend to nearly one-third of euro area employment".
• "Trade diversion from the United States, combined with China’s increasing competitiveness in high value-added industries, suggests that euro area firms must adapt to an increasingly competitive global environment".
• "Trade shocks can cause short-term disruptions and shifts in jobs between sectors. However, in the long run, total employment may not change much because the economy adjusts through wage changes and workers moving between industries".
• "Nevertheless, challenges like job market inefficiencies, costs of adjustment and government policies might cause temporary disruptions before the new equilibrium is reached".

Japan's former trade minister and a potential front-runner for the LDP leadership and PM role Saito stated that the BoJ must be cautious in raising interest rates. 

• Possibly more consequentially, Saito "urged Prime Minister Shigeru Ishiba to step down after last month's huge election loss, saying the ruling Liberal Democratic Party (LDP) must seek a third coalition partner under a new leader."
• "Saito pushed back against opposition calls to cut Japan's sales tax, saying that Japan must instead focus on growth policies aimed at creating a cycle of rising wages and prices." - Reuters

• There's way below average volumes at the start of the European session, Buxl is at times quoted as wide as 4 ticks wide.
• Looking at the UK Gilt, only a 12 ticks range in one hour of trading, since its Open.
• The Initial selling in Bond futures has been led by the long end 30yr part of the curve, the German long end supply equates to 19.2k Buxl, and given the much lower liquidity could be weighing.
• The Cash USTs is cheaper and steeper, and the US will also sell 10yr Notes later Today.