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JGBS: Cash Bonds Cheaper With US Tsys Ahead Of US Retail Sales

JGBS
GlobalBulletAPACFixed Income BulletsJapanRegionMarkets

JGB futures weaker but off Tokyo session lows, -22 compared to settlement levels.

  • Just released, September industrial production was revised up to 1.6% y/y. Japan’s operating ratio rose to 101.9 in September compared to 97.6 in the previous month. September Tertiary Industry Index falls 0.2% m/m versus +0.2% estimate.
  • Cash US tsys are flat to 2bps cheaper, with a steepening bias, in today’s Asia-Pac session after yesterday’s twist-flattener.
  • Later today, the US calendar will see Retail Sales, Empire Manufacturing, Import/Export Prices, Capacity Utilisation and Business Inventory data.
  • Cash JGBs are 1-2bps cheaper across benchmarks beyond the 1-year (+4.8bps). The benchmark 5-year yield is 1.8bps higher at 0.714% after today’s supply.
  • Today’s 5-year bond auction showed solid demand. The auction price exceeded dealer expectations, the cover ratio edged up and the auction tail shortened. The results were likely influenced by bids encountering an outright yield around 15bps higher than last month’s offering and at a cyclical peak.
  • The swap curve has bear-steepened, with rates 1-4bps higher.
  • On Monday, the local calendar will see Core Machine Orders data alongside BOJ Rinabn operation covering 1-3-year and 5-25-year OTR JGBs. Next Friday's national CPI for October is likely to be the next major focus point. Domestic-related services inflation will be eyed.
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JGB futures weaker but off Tokyo session lows, -22 compared to settlement levels.

  • Just released, September industrial production was revised up to 1.6% y/y. Japan’s operating ratio rose to 101.9 in September compared to 97.6 in the previous month. September Tertiary Industry Index falls 0.2% m/m versus +0.2% estimate.
  • Cash US tsys are flat to 2bps cheaper, with a steepening bias, in today’s Asia-Pac session after yesterday’s twist-flattener.
  • Later today, the US calendar will see Retail Sales, Empire Manufacturing, Import/Export Prices, Capacity Utilisation and Business Inventory data.
  • Cash JGBs are 1-2bps cheaper across benchmarks beyond the 1-year (+4.8bps). The benchmark 5-year yield is 1.8bps higher at 0.714% after today’s supply.
  • Today’s 5-year bond auction showed solid demand. The auction price exceeded dealer expectations, the cover ratio edged up and the auction tail shortened. The results were likely influenced by bids encountering an outright yield around 15bps higher than last month’s offering and at a cyclical peak.
  • The swap curve has bear-steepened, with rates 1-4bps higher.
  • On Monday, the local calendar will see Core Machine Orders data alongside BOJ Rinabn operation covering 1-3-year and 5-25-year OTR JGBs. Next Friday's national CPI for October is likely to be the next major focus point. Domestic-related services inflation will be eyed.