Free Trial

Futures Weaker As US Tsys Bear-Steepen After US CPI Data & 30Y Supply

JGBS

In post-Tokyo trade, JGB futures are sharply weaker, closing -32 compared to settlement levels, after US tsys finished 9-16bps cheaper across the major benchmarks, the curve bear steepened.

  • US tsys were pressured after Wednesday's CPI print was firmer than expected. Headline CPI rose 0.396% in September, ~0.1% higher than expected. Notably, the services component, excluding housing and energy, rose 0.6% m/m. Moreover, the Cleveland Fed’s mean and trimmed mean measures and the Atlanta Fed’s sticky CPI measure all showed a pick-up in core inflation for the second consecutive month.
  • US tsy losses extended after the latest 30-year supply tailed, with a weaker than the average bid/cover ratio observed. This development has raised concerns that a potential lack of demand for US tsys could drive rates to retest recent highs, with the 10-year yield possibly making a push towards the 5% mark.
  • Oil pared gains after US crude stockpiles rose 10.2 million barrels, the biggest increase since February, providing a buffer against heightened geopolitical risks in Israel and Gaza.
  • Today the local calendar sees Weekly International Investment and M2 & M3 Money Flows.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.