April 30, 2024 00:46 GMT
Futures Around Session Highs After Domestic Data Drop
JGBS
In Tokyo morning trade, JGB futures are sharply higher, 54 compared to settlement levels, after dealings resumed after yesterday’s public holiday.
- Japan's March job data was mixed. The jobless rate was at 2.6%, against a 2.5% forecast but unchanged from Feb's outcome. The job-to-applicant ratio was 1.28, against a 1.26 forecast and 1.26 prior. The broader labour market picture is unchanged compared to late 2023 trends. Arguably we need to see much higher job-to-applicant ratio levels to bring about a lower unemployment rate (i.e. back to pre-Covid levels).
- Other data showed retail sales for March weaker than forecast: -1.2% m/m and down to 1.2% y/y. IP was close to forecast at +3.8% m/m, but still -6.7% y/y. METI expects solid April and May gains for IP.
- Cash US tsys are slightly richer across benchmarks, continuing the rally since Thursday’s Q1 PCE Deflator-induced low.
- Cash JGBs are richer for most maturities, with yields flat to 2bps lower. The benchmark 10-year yield is 1.9bps lower at 0.872% versus the YTD high of 0.930%.
- The swaps curve has bull-flattened, with rates flat to 2bps lower. Swap spreads are wider out to the 10-year and tighter beyond.
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