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JGBS: Cash Bonds Cheaper, Curve Flatter After HH Spending Beats

JGBS
BulletAPACFixed Income BulletsJapanMarkets

In Tokyo morning trade, JGB futures are weaker, -23 compared to settlement levels, but above overnight closing levels.

  • Japan's Dec household spending outcome comfortably beat estimates. Real spending rose 2.7% y/y, versus a 0.5% BBG consensus forecast, and -0.4% for Nov. Nominal spending was up 7%y/y, matching a solid gain in incomes, which fits with the recent labour earnings data beat from earlier this week. Spending rose 2.3% in real terms m/m.
  • Today, the local calendar will also see Coincident/Leading Indices alongside BoJ Rinban Operations covering 1-10-year JGBs.
  • Cash US tsys are little changed in today’s Asia-Pac session ahead of today’s headline employment data for January, which is expected to slow to 170-180k from December’s strong 256k.
  • Cash JGBs are flat to 2bps cheaper, with a flattening bias, across benchmarks. The benchmark 10-year yield is unchanged at 1.277% versus the cycle high of 1.301%.
  • Swap rates are flat to 1bp lower. Swap spreads are mostly tighter.
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In Tokyo morning trade, JGB futures are weaker, -23 compared to settlement levels, but above overnight closing levels.

  • Japan's Dec household spending outcome comfortably beat estimates. Real spending rose 2.7% y/y, versus a 0.5% BBG consensus forecast, and -0.4% for Nov. Nominal spending was up 7%y/y, matching a solid gain in incomes, which fits with the recent labour earnings data beat from earlier this week. Spending rose 2.3% in real terms m/m.
  • Today, the local calendar will also see Coincident/Leading Indices alongside BoJ Rinban Operations covering 1-10-year JGBs.
  • Cash US tsys are little changed in today’s Asia-Pac session ahead of today’s headline employment data for January, which is expected to slow to 170-180k from December’s strong 256k.
  • Cash JGBs are flat to 2bps cheaper, with a flattening bias, across benchmarks. The benchmark 10-year yield is unchanged at 1.277% versus the cycle high of 1.301%.
  • Swap rates are flat to 1bp lower. Swap spreads are mostly tighter.