IRAN: "*WITKOFF: TALKS WITH IRANIAN DELEGATION THROUGH MEDIATORS

In post-Tokyo trade, JGB futures closed weaker, -10 compared to settlement levels, after US tsys finished Friday's session 2-5bps cheaper, with a flatter curve.

• Early trade on Friday saw the drift higher in US yields halted around 730am ET on a report that Iranian President Pezeshkian was in favour of ending the war with the US, but the impulse faded after further comments were decidedly less conciliatory.
• Cash US tsys came under significant pressure at around 9am ET in a bear flattening move, with 2Y yields rising 6bp to a high of 4.2501% and a Fed hike going from partially (22bp) to fully (26bp) priced by year-end. There was no clear catalyst for the move but it confirmed that the cash curve bear flattened for the week, a directional shift that of course was helped by Treasury's surprise announcement Wednesday that it was upping long-end buybacks.
• "Sanae Takaichi's cabinet support fell 3.5 points to 50.2%, a record low, according to a Kyodo poll." - BBG
• Today, the local calendar will be empty apart from 10-year Climate Transition supply.

Bloomberg Finance LP

ACGBs (YM flat & XM -0.5) are little changed despite US tsys finishing Friday's session 2-5bps cheaper, with a flatter curve. This week's scheduled highlights are GDP/PCE data on Wednesday and the Fed's Jackson Hole symposium running from Thursday evening through Saturday.

• While Federal Reserve officials and varied global central bank/policy figures will be in attendance at the annual Jackson Hole Economic Policy Symposium (Aug 27-29), the focus as always will be the opening speech by the Fed Chair at 1000am ET on Friday. With no title for his speech yet provided, it's unclear which approach Kevin Warsh will take for his first Jackson Hole keynote as Chair.
• Cash ACGBs are flat with the AU-US 10-year yield differential at +32bps.
• The bills strip pricing is -1 across contracts.
• RBA-dated OIS pricing shows modest tightening across all meetings, with the probability of a 25bp hike rising from 13% for September to 65% by December 2026.  
• Today, the local calendar will be empty ahead of the RBA Minutes of Aug. Policy Meeting on Tuesday and July CPI on Wednesday.
• This week, the AOFM plans to sell A$1200mn of the 1.00% 21 November 2031 bond on Tuesday and A$800mn of the 4.25% 21 December 2035 bond on Friday.

TYU6 is dealing at 108-09+, +0-01 from closing levels in today’s Asia-Pac session.

• Cash bonds finished Friday’s session 2-5bps cheaper, with a flatter curve.
• Early trade on Friday saw the drift higher in yield halted around 730am ET on a report that Iranian President Pezeshkian was in favour of ending the war with the US, but the impulse faded after further comments were decidedly less conciliatory.
• Cash bonds came under significant pressure at around 9am ET in a bear flattening move, with 2Y yields rising 6bp to a high of 4.2501% and a Fed hike going from partially (22bp) to fully (26bp) priced by year-end. There was no clear catalyst for the move but it confirmed that the cash curve bear flattened for the week, a directional shift that of course was helped by Treasury's surprise announcement Wednesday that it was upping long-end buybacks.
• The only notable data release was the flash August PMI report which showed a very strong Services component outweighing a softer Manufacturing print, but this had little lingering market impact.
• This week's scheduled highlights are GDP/PCE data on Wednesday and the Fed’s Jackson Hole symposium running from Thursday evening through Saturday – with Chair Warsh's keynote on Friday morning the focus of attention.

Bloomberg Finance LP