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Dipping Below 100bps For Next Two Fed Meetings


Cable drifts below 1.2500

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JGBS: JGB futures are -13 ticks worse off on the day, back from lows, after
bulls threatened, but ultimately failed, to force a clean break below the
overnight session low as the curve bear steepened. Steepening was already in
play during the Tokyo morning as Tokyo caught up with the overnight
developments, but the move deepened on the back of a Nikkei interview with BoJ
Gov. Kuroda, who noted that 20- & 30-Year yields have fallen "a bit too far," in
what was the Bank's latest effort to steepen the curve. The focus on longer
dated paper & failure to comment on the 10-Year yield being below -0.2% likely
aided the leg higher in futures during late Tokyo trade. Elsewhere, Kuroda noted
that cutting interest rates "further into the -ve zone is always an option," as
he re-hashed the 4 potential easing methods that he has outlined previously.
Elsewhere, Kuroda that "circumstances have not worsened enough to merit such
steps at this point." But he stressed that "caution is needed" in light of
unpredictable conditions overseas, particularly with regard to the trade war."
- The BoJ left the size of its 1-10 Year Rinban operations unchanged. The offer
to cover ratios were steady to lower, while yield spreads were higher.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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