Futures Off Lows But Still Cheaper, PPI Data Tomorrow

JGB futures are holding weaker, -15 compared to settlement levels, but higher than overnight closing levels seen on Friday.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined 4Q GDP (final) and M2 & M3 Money Stock data. Machine Tool Orders are due later today.
• (Bloomberg) -- The Bank of Japan is widely expected to scrap the world’s last negative interest rate in the coming weeks, marking the closing act of global central banks’ grand experiment with unorthodox policies. Governor Kazuo Ueda is forecast to raise the short-term rate from -0.1% either next week or in April in what would be the first rate hike in Japan since 2007, according to economists and bond traders. (See link)
• Cash US tsys are dealing 1bp cheaper to 1bp richer in today’s Asia-Pac session, with a flattening bias. News flow has been light.
• The cash JGB curve has bear-steepened, with yields flat to 4bps higher across benchmarks. The benchmark 10-year yield is 2.8bps higher at 0.763% after earlier testing the highest level for the year at 0.772%.
• The swaps curve has twist-steepened, pivoting at the 10s, with rates 2bps lower to 3bps higher. Swap spreads are tighter.
• Tomorrow, the local calendar sees PPI and BSI Business Conditions data, along with 5-year supply.