Holding Cheaper But Off Worst Levels, PPI Data & 5Y Supply Tomorrow

In Tokyo afternoon dealings, JGB futures are cheaper, -15 compared to settlement levels, but slightly above the session’s worst level.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined Money Stock data and the Q4 BSI Survey for Industries. Flash November Machine Tool Orders are due later.
• US tsys are holding 1-2bps cheaper across benchmarks in today’s Asia-Pac session but ranges have been tight. Little meaningful macro newsflow has crossed so far, with Friday's post-NFP lows intact.
• Bloomberg has reported that Nomura Securities Co. economists have moved up their forecast for when the Bank of Japan will end its negative interest rate policy to January 2024, citing positive economic signs and official comments. (See link)
• The cash JGB curve has bear-steepened, with yields 0.2bp to 3.3bps higher. The benchmark 10-year yield is 1.9bps higher at 0.785% versus the morning’s high of 0.802%.
• Swap rates are little changed across the curve out to the 30-year. The 40-year rate is 2.3bps higher at 1.61%. Swap spreads are tighter.
• Tomorrow, the local calendar sees PPI data for November, along with 5-year supply.