Futures Sitting Cheaper & Near Lows, Q4 GDP Data Tomorrow

JGB futures are holding sharply cheaper, -44 compared to settlement levels, but above the session low of 145.75 (-56). With the domestic calendar empty, apart from 10-year climate transition bond supply, local participants appear to have been content to use US tsys for directional guidance.

• (Bloomberg) -- Japan’s climate transition sovereign bond had a yield of 0.74%, according to MOF, lower than the 0.75% yield for regular government notes maturing on the same day, indicating strong demand from investors.
• Cash US tsys are currently dealing flat to 3bp richer, with the benchmark curve steeper, ahead of Wednesday's release of PPI revisions. Fed speakers Chicago Fed Goolsbee and Fed VC Barr are also scheduled.
• (Straits Times) -- Japan's latest growth figures are set to confirm that it slipped to the fourth-largest economy in the world in 2023, a development that reflects the impact of its feeble currency and ageing demographics. (See links)
• The cash JGB curve has bear-steepened, with yields 1-5bps higher. The benchmark 10-year yield is 3.1bps higher at 0.758% versus the morning high of 0.765%.
• The swaps curve is mostly cheaper, with rates 1-4bps higher. Swap spreads are tighter out to the 30-year.
• Tomorrow, the local calendar sees Q4 GDP (Prelim), December Industrial Production (Final) and December Capacity Utilisation data.
• Tomorrow will also see BoJ Rinban operations covering 1-5-year and 10-25-year+ JGBs.