Trial now

Corrective Cycle Still In Play


Approaching Recent Highs

JGBS: Futures ticked back from the overnight session highs, finishing the
morning session 4 ticks lower than settlement, failing to draw support from the
~0.9% fall in the Nikkei 225.
- Yields unch. to a touch higher across the curve, with swaps running a little
wider on the day.
- Little reaction to comments from Japanese FinMin Aso who revealed that Japan
will compile a second additional budget for 2018/19 with focus on mitigating the
effects of the recent natural disasters and the scheduled 2019 sales tax hike.
- Little reaction in the space as BoJ Gov. Kuroda noted that he believes current
MonPol settings will bring about inflation in Japan. Kuroda also noted that the
"possibility of reaching the inflation target in FY2020 is low."
- 20-Year JGB auction due this afternoon. 20-Year paper looks a little rich in
Z-spread & ASW terms when compared to 30-Year paper. 10-Year paper offers a
marginally more attractive carry & roll proposition at present, although 20-Year
paper is much more attractive than 30-Year paper on this perspective.
MNI London Bureau | +44 0203-865-3809 |