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JGBS: Bull-Flattener Ahead Of US Payrolls Data

JGBS
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JGB futures are stronger and near session bests, +8 compared to settlement levels, despite slightly better than expected domestic data.

  • BOJ-dated OIS pricing continues to hold firmer across meetings versus levels prevailing ahead of the BOJ’s October 30-31 meeting.
  • However, pricing is 1-5bps softer across meetings compared to earlier in the week despite today’s labour earnings and household spending figures being a little better than expected, albeit more so in real than nominal terms.
  • Currently, OIS pricing sits 3-15bps firmer across meetings versus pre-BOJ MPM (Oct), with September 2025 leading the gains.
  • Cash US tsys are slightly mixed, with a flattening bias, in today’s Asia-Pac session ahead of US Payrolls data. Payroll growth is expected to bounce sharply to 215k in November after October’s strike and weather-related disruption.
  • Cash JGBs are little changed across benchmarks to the 7-year and 1-2bps richer beyond.
  • The swaps curve has twist-steepened, pivoting at the 20-year, with rates 2bp lower to 2bps higher. Swap spreads are mixed.
  • On Monday, the local calendar will see Q3 GDP (F) and Bank Lending data alongside BOJ Rinban Operations covering 1-3-year, 5-10-year and 25-year+ JGBs.
  • “Japan’s 3Q GDP is likely to be revised up to show 1.7% growth (quarter-on-quarter annualized) from a preliminary estimate of a 0.9% expansion.” (per BBG)
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JGB futures are stronger and near session bests, +8 compared to settlement levels, despite slightly better than expected domestic data.

  • BOJ-dated OIS pricing continues to hold firmer across meetings versus levels prevailing ahead of the BOJ’s October 30-31 meeting.
  • However, pricing is 1-5bps softer across meetings compared to earlier in the week despite today’s labour earnings and household spending figures being a little better than expected, albeit more so in real than nominal terms.
  • Currently, OIS pricing sits 3-15bps firmer across meetings versus pre-BOJ MPM (Oct), with September 2025 leading the gains.
  • Cash US tsys are slightly mixed, with a flattening bias, in today’s Asia-Pac session ahead of US Payrolls data. Payroll growth is expected to bounce sharply to 215k in November after October’s strike and weather-related disruption.
  • Cash JGBs are little changed across benchmarks to the 7-year and 1-2bps richer beyond.
  • The swaps curve has twist-steepened, pivoting at the 20-year, with rates 2bp lower to 2bps higher. Swap spreads are mixed.
  • On Monday, the local calendar will see Q3 GDP (F) and Bank Lending data alongside BOJ Rinban Operations covering 1-3-year, 5-10-year and 25-year+ JGBs.
  • “Japan’s 3Q GDP is likely to be revised up to show 1.7% growth (quarter-on-quarter annualized) from a preliminary estimate of a 0.9% expansion.” (per BBG)