Futures Holding Sharply Cheaper At Lunch, Labour & Real Cash Earnings Tomorrow

At the Tokyo lunch break, JGB futures are holding sharply weaker, -59 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 are due tomorrow.
  
• US tsy futures have continued their move lower in today’s morning Asia-Pac trading, with Fed Chair Powell speaking on 60 Minutes in a pre-recorded interview. He mentioned that there needs to be more disinflation evidence to cut rates. Cash US tsys are trading 3-6bps cheaper, with a flattening bias.
• The cash JGBs are cheaper across the curve, with 10-20-year zone leading (5bps cheaper). The benchmark 10-year yield is 4.8bps higher at 0.72% versus the Nov-Dec rally low of 0.555%.
• (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 link)
• The swaps curve has bull-steepened, with rates flat to 5bps higher. Swap spreads are tighter out to the 30-year.