Futures Cheaper & At Session Lows, Enhanced-Liquidity Auction Due

In the afternoon session, JGB futures sit in negative territory and at session lows, -8 compared to the settlement levels.

• There hasn’t been much in the way of domestic drivers to flag today. December’s Tertiary Industry Index has just been released showing a rise of 0.7% m/m versus +0.2% est.
• Later today, the MoF will conduct an Enhanced-Liquidity Auction for OTR 15.5-39-year JGBs.
• BoJ Governor Ueda, in Parliament today, said the BoJ will consider whether it will keep its large-scale monetary easing policies including the negative rate once its price goal comes into sight. That said, financial conditions are likely to stay accommodative for the time being even if the negative rate is ended given the current economic outlook.
• Cash US tsys are dealing 2-3bps cheaper in today’s Asia-Pac session after Atlanta Federal Reserve President Raphael Bostic said after market that he is still not thoroughly convinced inflation is on track to the central bank's 2% target (MNI)
• Cash JGBs are dealing mixed, with yield movements across the curve bounded by +/- 2bps. The benchmark 10-year yield is 0.9bp higher at 0.735% versus the February low of 0.665%.
• The swaps curve has slightly bear-steepened out to the 20-year, with rates unchanged beyond. Swap spreads are wider.
• The local calendar sees Core Machine Orders on Monday, ahead of 20-year supply on Tuesday.