[MARKET ANALYSIS] T-note futures are rangebound with demand contained following the post-PCE declines

USTs: +1 tick

• Price action is contained after declining yesterday as Treasury yields rose across the curve following the US PCE data, in which the headline printed firmer-than-expected, while participants await a 2yr US auction and the start of the Jackson Hole Symposium.

Bunds: -11 ticks

• Lingers around the prior day's trough following recent supply and as German GfK Consumer Confidence looms.

JGBs: -6 ticks

• Tracked recent downside in global counterparts and with prices not helped by comments from BoJ Deputy Governor Himino, who believes the BoJ should continue to raise rates and wants to avoid a situation where delaying a rate hike leads to sharp inflation and requires rapid rate increases thereafter.

Post-PCE sessions of this kind follow a familiar rhythm: the initial repricing of the front end after a firmer inflation print tends to give way to consolidation while the market waits for the next catalyst, which in this instance is a fresh test of demand at the short end via the 2yr auction. A hot core print with contained follow-through selling has historically been read as positioning already leaning hawkish, so auction concession and the resulting tail or stop-through carry more information than the drift. Jackson Hole in the background changes the calendar calculus, since the symposium has on past occasions served as the venue for signalling shifts in reaction functions, which keeps demand for duration muted into the event rather than after it. The Bund leg, supply-heavy with German confidence data pending, and the JGB leg, pushed lower by explicit BoJ tightening rhetoric, illustrate the usual pattern in which idiosyncratic domestic drivers dominate when the UST tape is quiet, with JGBs the most sensitive to official jawboning given the historically narrow band the BoJ has tolerated. The transmission to watch is the belly and front of the US curve into the auction result, and whether any hawkish framing from the symposium validates or fades the post-PCE move in yields.