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Bull-Steepener Ahead Of Long Weekend, Focus On US PPI Later Today

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JGB futures are stronger but holding mid-range, +23 compared to the settlement levels.

  • May industrial production was revised up to +3.6% m/m (1.1% y/y) versus +2.8% m/m (+0.3% y/y) prior. Meanwhile, the May Operating Ratio rose 4.1% m/m to 103.8.
  • (Bloomberg) Japan’s finance ministry will need to broaden its pool of bond buyers beyond banks as they won’t be able to fill the vacuum left by the Bank of Japan, according to an economist on a finance ministry panel. (See link)
  • (RTRS) Nearly 90% of Japanese households expect prices to rise a year from now, a quarterly central bank survey showed on Friday.
  • Cash US tsys are slightly cheaper in today’s Asia-Pac session. In the absence of news flow, this weakening in US tsys most likely reflects some profit-taking after yesterday’s solid rally.
  • The US market’s focus now turns to today’s June PPI and UofM Sentiment and the start of the latest equity earnings cycle: Wells Fargo, Bank of NY Mellon, JP Morgan and Citigroup headlining.
  • The cash JGB curve has bull-flattened, with yields 1-3bps lower. The benchmark 10-year yield is 2.4bps lower at 1.066% versus the cycle high of 1.108%.
  • Swap rates are flat to 1bp lower. Swap spreads are mostly wider.
  • The local market is closed on Monday in observance of the Marine Day holiday.
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JGB futures are stronger but holding mid-range, +23 compared to the settlement levels.

  • May industrial production was revised up to +3.6% m/m (1.1% y/y) versus +2.8% m/m (+0.3% y/y) prior. Meanwhile, the May Operating Ratio rose 4.1% m/m to 103.8.
  • (Bloomberg) Japan’s finance ministry will need to broaden its pool of bond buyers beyond banks as they won’t be able to fill the vacuum left by the Bank of Japan, according to an economist on a finance ministry panel. (See link)
  • (RTRS) Nearly 90% of Japanese households expect prices to rise a year from now, a quarterly central bank survey showed on Friday.
  • Cash US tsys are slightly cheaper in today’s Asia-Pac session. In the absence of news flow, this weakening in US tsys most likely reflects some profit-taking after yesterday’s solid rally.
  • The US market’s focus now turns to today’s June PPI and UofM Sentiment and the start of the latest equity earnings cycle: Wells Fargo, Bank of NY Mellon, JP Morgan and Citigroup headlining.
  • The cash JGB curve has bull-flattened, with yields 1-3bps lower. The benchmark 10-year yield is 2.4bps lower at 1.066% versus the cycle high of 1.108%.
  • Swap rates are flat to 1bp lower. Swap spreads are mostly wider.
  • The local market is closed on Monday in observance of the Marine Day holiday.