JGBS: Unwinding Of Post-Election Sell-Off Continues

JGB futures are stronger, +43 compared to settlement levels, and at session bests on a data-light day.

• Cash US tsys are 1-2bps richer, with a flattening bias, in today's Asia-Pac session.
• Wednesday sees an unusual BLS nonfarm payrolls report after a brief delay following last week's government shutdown, with January details released at 0830ET. The report will need to be assessed holistically rather than focusing on any single number, although the unemployment rate should offer the cleanest single take. Consensus looks for a circa 70k increase in nonfarm payrolls coming almost entirely from private payrolls. (See MNI US Payroll Preview here)
• The local calendar will also see Machine Tool Orders data later.
• "Japanese bonds are performing better than feared by some investors after the elections, partly because there is a delay to the sales tax cut, which had been flagged ahead of the vote." - BBG
• Cash JGBs are 2-4bps richer across benchmarks, with the futures-linked 7-year once again leading. The benchmark 10-year yield is 2.8bps lower at 2.261% versus the cycle high of 2.359%.
• Swap rates are flat to 2bp richer, with a flattening bias.
• Tomorrow, the local calendar will see PPI and Tokyo Avg Office Vacancies data.