US Inflation Data and Treasury Buybacks Take Center Stage

US inflation data and treasury buybacks are in focus for markets this week. The latest nonfarm payrolls report saw a surprise increase of 162k jobs, exceeding consensus estimates of 55k. Unemployment rates remain steady at 4.1%. Markets are awaiting the upcoming US inflation data print, particularly as Fed Chair Warsh has indicated that further policy action may be needed if inflation does not move towards the 2% target.

The Treasury's larger long-end buybacks will also be closely watched, though it is unlikely to significantly impact longer-term yields given persistent fiscal deficits and reduced Fed holding share in the treasury market. In Singapore, manufacturing activity expanded for a 13th consecutive month in August, with a PMI reading of 51.5.

Singapore's GDP growth forecast has been raised to 5% from 3.5%, driven by strong exports and factory output in the first half of this year. China's money market conditions have eased at the start of September, with net central and local government bond issuance near zero. This is expected to support Chinese government bonds.