[MARKET ANALYSIS] Fixed income steady with US NFP ahead
- UST Futures stabilise after Thursday’s selloff, primarily driven by higher energy prices amid heightened geopolitical tensions, albeit quite briefly. In short, the US military confirmed that it defensively attacked Iranian military facilities after Iran attacked US destroyers in the Strait. Despite the exchange of fire, US President Trump said the ceasefire is still on. Currently, USTs rotate in a 4-tick range with US NFP ahead.
- Bund Futures, similarly, consolidates after it returns below the 126.00 handle. ECB speakers in the latter end of Thursday’s session failed to move debt, after chief-hawk Schnabel highlighted that some of the damage done from the war will be hard to reverse, and that if wages increase in response to higher energy prices, it will be a sign to be reactive.
- JGB Futures steadily climb from Thursday’s post-cash selloff, helped by the pullback in energy prices.
Context
With the anticipation of the US Non-Farm Payroll (NFP) data, fixed income markets have stabilized following a recent selloff attributed to rising energy prices and geopolitical tensions. The interplay of these factors, particularly the comments from ECB officials regarding wage pressures and the effects of the war, suggests that any significant movement in yields might hinge on the NFP results, impacting the broader rate outlook and sentiment across assets.
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