Futures Richer As Rally In US Tsys Extended

In post-Tokyo trade, JGB futures are sharply richer, closing +48 compared to settlement levels, after US tsys bull-flattened, with yields finishing 4-14bps lower. The 2-year yield declined 7bps following yesterday’s 25bp drop, which was the largest daily decline since the collapse of Silicon Valley Bank in March. The 10-year yield fell 10bps to 3.92%, the lowest level since June.

• TYH4 has re-opened trading at 112-15+, -0-01 from NY closing levels.
• The ECB left interest rates unchanged at 4.0% for the second consecutive meeting, as expected. In an attempt to curtail easing expectations, ECB President Lagarde said rate cuts were not discussed at all and policymakers mustn’t get complacent following the recent fall in inflation.
• The BOE maintained its policy rate at 5.25%, which was in line with expectations. The vote was split 6-3 with three committee members still favouring a 25bps hike.
• On the data front we have preliminary PMIs for Dec on tap. Note the LDP will use more tax incentives to encourage wage increases (see this BBG link)