Canadian bills – Bill prices eased slightly in response to the slight beat for employment trends during May. Owing to a jump in full-time jobs the economy added a net 22,300 positions sending the unemployment rate lower to 7.4%. But with 75% of Canada’s export heading U.S.-bound, the report is unlikely to change any conviction at the Bank of Canada as the clear picture remains one of American economic weakness. Thanks to a jump in Eurodollar futures, bill futures remain higher on the session although lower than this week’s best levels. Government bond prices rose to send the 10-year yield below 3% in to the weekend with the September futures contract adding 38 ticks to 125.00.
Australian bills – Asian stock markets failed to sustain a rally as risk aversion resumed. The local dollar fell while the trend towards further curve flattening was apparent in a gain for bill futures. The 10-year government bond price also rose sharply shaving six basis points off the yield to 5.17%.
Japanese bonds – Japanese yields bucked the trend as consumer confidence rose alongside machine tool orders in May. The September JGB future advanced by 13 ticks while the 10-year yield also advanced by one basis point to 1.13%.
Andrew Wilkinson is a Senior Market Analyst at Interactive Brokers LLC
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