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JGBS: Belly Of Cash Curve Leads Richening

JGBS
GlobalBulletAPACFixed Income BulletsJapanRegionMarkets

In Tokyo morning trade, JGB futures are sharply higher, +49 compared to settlement levels, as trading resumed after yesterday’s holiday.

  • Jibun Bank Flash PMIs for September have printed: Mfg Index fell to 49.6 from 49.8 in Aug.; Services Index rose to 53.9 from 53.7 in Aug.; and Composite Index fell to 52.5 from 52.9 in Aug.
  • Before the BoJ decision last Friday, a Bloomberg survey had shown that most forecasters anticipated a rate hike in December, while a more hawkish minority expected an October hike. However, these hawkish expectations were dampened after Ueda highlighted the importance of October’s service price data and noted that inflationary risks had eased since the yen's recent strengthening. (See MNI’s BoJ Review here)
  • Cash US tsys are slightly richer in today’s Asia-Pac session after yesterday’s modest cheapening.
  • Cash JGBs are mostly richer across benchmarks, with 5-year to 20-year yields around 2.75bps lower.
  • The swaps curve has twist-steepened, with yields 2bps lower to 4bps higher. Swap spreads are mostly wider.
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In Tokyo morning trade, JGB futures are sharply higher, +49 compared to settlement levels, as trading resumed after yesterday’s holiday.

  • Jibun Bank Flash PMIs for September have printed: Mfg Index fell to 49.6 from 49.8 in Aug.; Services Index rose to 53.9 from 53.7 in Aug.; and Composite Index fell to 52.5 from 52.9 in Aug.
  • Before the BoJ decision last Friday, a Bloomberg survey had shown that most forecasters anticipated a rate hike in December, while a more hawkish minority expected an October hike. However, these hawkish expectations were dampened after Ueda highlighted the importance of October’s service price data and noted that inflationary risks had eased since the yen's recent strengthening. (See MNI’s BoJ Review here)
  • Cash US tsys are slightly richer in today’s Asia-Pac session after yesterday’s modest cheapening.
  • Cash JGBs are mostly richer across benchmarks, with 5-year to 20-year yields around 2.75bps lower.
  • The swaps curve has twist-steepened, with yields 2bps lower to 4bps higher. Swap spreads are mostly wider.