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JGBS: Futures Off Post BoJ Highs, National CPI, BoJ Bond Ops Today

JGBS
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JGB futures finished up post Tokyo trade at 142.27, +.13 above settlement levels for March Futures (JBH5). Post BoJ highs in the contract were just above 142.50, more than 60 ticks above post US FOMC lows. The central bank didn't give urgency around a Q1 hike, although the door is still ajar for such a move. 

  • Spill over from weaker back end US Tsy futures (as the Tsy yield curve steepened through Thursday) likely help curb upside in JGB futures.
  • More broadly though the March JGB futures remains within ranges for Dec. Medium-term trend signals on the continuation chart continue to point south. A resumption of the trend would pave the way for a move towards 141.88 and 141.56, Fibonacci projection points on the continuation chart.
  • In the cash JGB space, the 10yr yield finished up sub 1.08% yesterday, so still below recent highs. BoJ hiking odds were pared as Thursday unfolded, with a full 25bps hike not completely priced until June next year (per WIRP on BBG).
  • There was little change in other back end yields. The 10yr swap rate was last just under 1.04%.
  • Today we have the Nov National CPI print. The market expects a pick up in the y/y pace to be comfortably above 2% across the headline and core metrics.
  • We also have BoJ bond buying ops. 
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JGB futures finished up post Tokyo trade at 142.27, +.13 above settlement levels for March Futures (JBH5). Post BoJ highs in the contract were just above 142.50, more than 60 ticks above post US FOMC lows. The central bank didn't give urgency around a Q1 hike, although the door is still ajar for such a move. 

  • Spill over from weaker back end US Tsy futures (as the Tsy yield curve steepened through Thursday) likely help curb upside in JGB futures.
  • More broadly though the March JGB futures remains within ranges for Dec. Medium-term trend signals on the continuation chart continue to point south. A resumption of the trend would pave the way for a move towards 141.88 and 141.56, Fibonacci projection points on the continuation chart.
  • In the cash JGB space, the 10yr yield finished up sub 1.08% yesterday, so still below recent highs. BoJ hiking odds were pared as Thursday unfolded, with a full 25bps hike not completely priced until June next year (per WIRP on BBG).
  • There was little change in other back end yields. The 10yr swap rate was last just under 1.04%.
  • Today we have the Nov National CPI print. The market expects a pick up in the y/y pace to be comfortably above 2% across the headline and core metrics.
  • We also have BoJ bond buying ops.