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JGBS: Cash Bonds Sharply Richer Led By 7Y After Yesterday’s Holiday

JGBS
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In Tokyo morning trade, JGB futures are sharply higher, +61 compared to settlement levels, after trading resumed after yesterday’s holiday.

  • The Japan services PPI edged up to 3.1%y/y in Jan. This was in line with market forecasts and compared to the revised 3.0% gain from Dec (which was originally reported as a 2.9% rise). The m/m shift was -0.5%, after a flat outcome in Dec.
  • The services PPI is very close to recent cycle highs and consistent with elevated headline inflation pressures, even if m/m services PPI readings have lost some momentum in recent months.
  • Later today, department store sales print, along with machine tool orders (both for Jan). There is also an Auction for Enhanced-Liquidity 15.5-39-year.
  • Cash US tsys are 1-2bps richer in today’s Asia-Pac session after yesterday’s modest gains.
  • Cash JGBs are 1-6bps richer across benchmarks, with the 7-year leading. The benchmark 10-year yield is 5.3bps lower at 1.377% versus the cycle high of 1.466%, set last week.
  • Swap rates are 1-3bps lower. Swap spreads are generally wider.
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In Tokyo morning trade, JGB futures are sharply higher, +61 compared to settlement levels, after trading resumed after yesterday’s holiday.

  • The Japan services PPI edged up to 3.1%y/y in Jan. This was in line with market forecasts and compared to the revised 3.0% gain from Dec (which was originally reported as a 2.9% rise). The m/m shift was -0.5%, after a flat outcome in Dec.
  • The services PPI is very close to recent cycle highs and consistent with elevated headline inflation pressures, even if m/m services PPI readings have lost some momentum in recent months.
  • Later today, department store sales print, along with machine tool orders (both for Jan). There is also an Auction for Enhanced-Liquidity 15.5-39-year.
  • Cash US tsys are 1-2bps richer in today’s Asia-Pac session after yesterday’s modest gains.
  • Cash JGBs are 1-6bps richer across benchmarks, with the 7-year leading. The benchmark 10-year yield is 5.3bps lower at 1.377% versus the cycle high of 1.466%, set last week.
  • Swap rates are 1-3bps lower. Swap spreads are generally wider.