Cheaper, 10Y-20Y Underperforming, Labour & Real Cash Earnings Tomorrow

JGB futures are holding sharply weaker, -65 compared to settlement levels.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined Jibun Bank PMI Services & Composite. Labour and Real Cash Earnings, and Household Spending are due tomorrow.
• Cash US tsys are 2-6bps cheaper in today’s Asia-Pac session following Fed Chair Powell's appearance on 60 Minutes. This comes after Friday’s aggressive sell-off sparked by much stronger-than-expected Nonfarm Payrolls data.
• The cash JGBs are cheaper across the curve, with 10-20-year zone leading (5bps cheaper). The benchmark 10-year yield is 5.1bps higher at 0.723% versus the Nov-Dec rally low of 0.555%.
• The auction of 10-year inflation-indexed bonds drew a lower-than-expected cut-off price (104.50 vs 105.00 estimated by traders in the Bloomberg survey). However, the bid-to-cover ratio did increase to 3 from 2.73 at the previous sale on Nov. 7.
• (MNI) The BoJ on Monday offered to buy a total of JPY9 trillion of Japanese government bonds under repurchase agreements to cope with the rise of tomorrow's next repo rates caused by temporary strong fund demand. (See linkICYMI)
• The swaps curve has bull-steepened, with rates flat to 5bps higher. Swap spreads are tighter out to the 30-year.