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JGBS: Futures Spike, But Past Month Ranges Hold, BoJ Ueda Speech Next Week

JGBS
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JGB futures have mostly maintained a positive bias through the first part of Friday trade. The March future (JBH5) was last 142.56, +.42, versus settlement levels. Earlier highs were at 142.72, which were close to earlier Dec 9 highs. 

  • These moves threaten to break us out of ranges that have held over the past month or so.
  • Support has been evident from a positive US Tsy futures backdrop. US equity futures are down as well, with some concern around a government shut down in the near term, with the US House failing to pass the latest funding bill late on Thursday US time. A generally softer commodity price backdrop in the past week has also likely been a support.
  • Earlier on the data front we had Nov national CPI print, which was a touch above market expectations for the core print, but the detail was mostly softer outside of a bounce in utility prices. Yen has been volatile as verbal jawboning picks up after Thursday's sharp drop.
  • Cash JGB yields are all softer, with the belly of the curve the weakest in yield terms. The 7ys is down 3bps to sub 0.79%. The 10yr yield is back to 1.05%.
  • Swap rate falls have been slightly in the belly of the curve. The 10yr swap rate is back close to 1.00%.
  • Next week we have the Oct BoJ Mins on Dec 24, while Governor Ueda will speak on Christmas day, then the Summary of Opinions from the BoJ Dec meeting will be released on Dec 27th. Also out on the 27th is Tokyo Dec CPI. 
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JGB futures have mostly maintained a positive bias through the first part of Friday trade. The March future (JBH5) was last 142.56, +.42, versus settlement levels. Earlier highs were at 142.72, which were close to earlier Dec 9 highs. 

  • These moves threaten to break us out of ranges that have held over the past month or so.
  • Support has been evident from a positive US Tsy futures backdrop. US equity futures are down as well, with some concern around a government shut down in the near term, with the US House failing to pass the latest funding bill late on Thursday US time. A generally softer commodity price backdrop in the past week has also likely been a support.
  • Earlier on the data front we had Nov national CPI print, which was a touch above market expectations for the core print, but the detail was mostly softer outside of a bounce in utility prices. Yen has been volatile as verbal jawboning picks up after Thursday's sharp drop.
  • Cash JGB yields are all softer, with the belly of the curve the weakest in yield terms. The 7ys is down 3bps to sub 0.79%. The 10yr yield is back to 1.05%.
  • Swap rate falls have been slightly in the belly of the curve. The 10yr swap rate is back close to 1.00%.
  • Next week we have the Oct BoJ Mins on Dec 24, while Governor Ueda will speak on Christmas day, then the Summary of Opinions from the BoJ Dec meeting will be released on Dec 27th. Also out on the 27th is Tokyo Dec CPI.