BoJ To Conduct Bond Purchase Ops, ACGBs Await Inflation Data

Core FI markets have stabilised in early Asia-Pac trade, with benchmark futures contracts moving away from overnight highs.

• T-Notes have edged lower, mowing away from Tuesday's intraday high of 120-16. TYM2 changes hands +0-09 at 120-10+, while Eurodollar futures trade 3.0-4.5 ticks higher through the reds. Cash curve has bear flattened, with yields last seen 1.6bp-3.0bp higher. Flash wholesale inventories & 5-Year debt auction headline the U.S. docket today.
• JGB futures have given away their opening gains and last trade at 149.42, 10 ticks above previous settlement. Cash JGB yields have slipped across the curve, with the super-long end leading gains. Note that on Tuesday the BoJ added two more rounds of unlimited fixed-rate bond purchase operations to defend its 0.25% cap on 10-year yields. The central bank will buy debt both today and tomorrow, which coincides with its two-day monetary policy meeting. In addition, Japan will hold an auction for 2-Year JGBs today.
• Australian YM & XM have ticked lower, in line with their core FI peers. Bills run 2-14 ticks higher through the reds. Cash ACGBs caught a bid as trading resumed in Sydney, with the space catching up with overnight market impetus, but have trimmed gains since. Yield last sit 5.0bp-6.3bp lower across the curve. All eyes are on Australia's quarterly CPI data today, with the key gauge of core inflation expected to break out of the RBA's target range.