Holding Firm But Off Best Levels On BoJ Speculation
ACGBS look through the latest round of domestic trade balance data, which saw a wider than expected surplus in November, although the internals weren’t particularly firm. Bond futures have edged away from overnight/early Sydney peaks, aided by the speculation surrounding the BoJ that we have covered elsewhere, although the move in the space has been marginal. That leaves YM +5.0 & XM +7.5, with the major cash ACGB benchmarks running 5-8bp richer as the early bull flattening impulse holds. EFPS are a touch tighter on the day, indicating receiver-side swap flows aiding the bid.