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Futures Lower, March Headline Wages Weaker Than Forecast

JGBS

JGB futures (JBM4) maintained a downside bias post the onshore close yesterday. We finished up at 144.36, -.20 versus settlement levels. This was in line with a generally softer global fixed income backdrop.

  • For JBM4, earlier April lows came in just under 144.25, which could be eyed on the downside. Note the April 26 low was at 143.61. May 8 highs came in at 144.88.
  • On the data front, we have just had March labor cash earnings print. The nominal print came in at 0.6% y/y, versus 1.4% forecast (and prior). Real wages slumped to -2.5% y/y against a -1.4% forecast. It was better in terms of cash earnings on a same sample basis. This metric rose 2.2%y/y in line with expectations. Scheduled full time pay on a same base rose 2.3% y/y, versus 1.9% forecast.
  • Coming up shortly is the BoJ summary of opinions from the April policy meeting. Later on we get Tokyo office vacancies for April and the Mar (preliminary) leading and coincident indices.
  • In the cash JGB space, the 10yr yield finished up at 0.88%. We remain within recent ranges for this benchmark. The 10yr swap was last just under 0.97%.
  • On the supply front we have 6 mth bills on tap.

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