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Futures Stronger, Mid-Ramge, Tokyo CPI Tomorrow


JGB futures are currently maintaining a mid-range position and are in positive territory, up by 11 points compared to settlement levels.

  • There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined Q4 capital spending and company profits data.
  • Cash US tsys are 1-2bps cheaper in today's Asia-Pac session. Newsflow has been light so far.
  • The cash JGB curve has twist-steepened, pivoting at the 10s, with yields 1.2bps lower (2-year) to 1.0bp higher (20-year). The benchmark 10-year yield is unchanged at 0.717% versus the Nov-Dec rally low of 0.555%.
  • Swaps are richer, with rates flat to 2bps lower. Swap spreads are generally tighter.
  • (Bloomberg) -- Japan’s government bonds have cheapened relative to swaps amid expectations that an end of the negative-interest-rate policy in the nation is now just a matter of time, Koichi Sugisaki, executive director at Morgan Stanley MUFG Securities in Tokyo, writes in a note. (See link)
  • Tomorrow, the local calendar sees Tokyo CPI and Jibun Bank PMI Composite & Services data, along with 10-year supply. BoJ Governor Ueda is also due to give a speech at FIN/SUM 2024.

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