Futures Cheaper With US Tsys, Labour Market Data Slightly Stronger

In post-Tokyo trade, JGB futures are cheaper, closing -17 compared to settlement levels, after Us tsys pared November’s rally into month end. Yields finished 4-7bps higher, with the 10-year leading. The US tsy 10-year yield rose 7bps to 4.33% but is still down 65bps from the cycle high of 5.01%.

• There was a deluge of US data, none of which promoted an extension of the recent large rally. Core PCE was close to expected at 0.16% m/m, while US initial jobless claims printed in line with expectations at 218k. The MNI Chicago PMI was, however, much stronger than expected.
• October’s Jobless Rate printed at 2.5% versus an unchanged estimate of 2.6%. Job-To-Applicant Ratio also printed stronger than expected at 1.30 versus an unchanged estimate of 1.29.
• Later today sees Q3 Capital Spending and Company Profits, and the final manufacturing PMI read for November.
• Bloomberg reports that while the BOJ has made its yield-curve control program more flexible, bond traders are still struggling with a poorly functioning market that remains firmly under the thumb of policymakers. That put a sharp focus on Thursday’s release of the BOJ’s buying plan for December, and disappointment for traders when the central bank left the ranges for buying in line with November. (See link)