Curve Bear-Steepens, Light Local Calendar

In Tokyo morning trade, JGB futures are holding overnight losses seen before the weekend, -25 compared to settlement levels.

• The local calendar is relatively light today. November M2 & M3 Money Stock was slightly softer at 2.3% and 1.7% respectively. Q4 BSI Survey for All Industries printed softer than the previous read but Large Manufacturing accelerated q/q. Flash November Machine Tool Orders are due later.
• Further out, PPI, Tankan Survey, Core Machine Orders, Industrial Production, Jibun Bank PMIs and Dept Store Sales are all due this week.
• JGB futures slid sharply Friday, refuting the recent bullish bias and returning prices to support, according to MNI’s technicals team. 143.44, the October 31 low, mark key support and a medium-term bear trigger. Initial support is at 145.53, the November 27 low. Any return higher will meet resistance at 147.27 and above at 148.74.
• Cash US tsys have opened dealing ~1bp cheaper across the major benchmarks in today’s Asia-Pac session.
• The cash JGB curve bear-steepens, with yields 1.3bp to 4.7bps higher. The benchmark 10-year yield is 3.1bps higher at 0.797% versus last week’s rally low of 0.622%.
• Swaps curve has also bear-steepened, with rates 0.3bp to 3.6bps higher. Swap spreads are tighter out to the 30-year.