Futures Unchanged In Overnight Dealings On Friday, BOJ Tweak Fears

In post-Tokyo trade ahead of the weekend, JGB futures were unchanged compared to settlement levels, despite US tsys finishing Friday’s NY session with a bull steepening. US tsy yields were 3-10bps lower, with the 2-year yield at 5.07% and the 10-year 8bps lower at 4.91%. The cycle high remained at 4.99%.

• US equity indices were 0.9-1.5% lower on Friday, with the S&P500 breaking below the 200-day moving average.
• Oil prices eased on Friday, with Brent crude futures edging down 0.2% to $US92.16 a barrel and the WTI November contract dropping 0.7% to $US88.75.
• US tsy futures have opened the week softer, TYZ3 dealing at 105-26+, -0-05+ compared to NY closing levels. A Nikkei report that the BOJ may consider further tweaking its YCC settings is weighing on the space in early trade.
• BOJ officials are pondering whether to tweak the settings of the yield-curve control program as domestic long-term interest rates float higher in tandem with those in the US, the Nikkei newspaper reported on Sunday, without saying where it obtained the information. (See Bloomberg link)
• Today, the local calendar is empty ahead of tomorrow's Jibun Bank PMIs and Department Sales.
• Today sees BOJ Rinban operations covering 1- to 25-year JGBs.