JGBS: Cash Bonds Little Changed, BoJ Dec Hike - Kameda

In afternoon trading, JGB futures are weaker, -9 compared to the settlement levels, but stronger than morning levels following a solid 10-year auction.

• (MNI) The BoJ is likely to raise its policy interest rate further in December if financial markets and the Federal Reserve both foresee a soft landing for the US, former BoJ Chief Economist Seisaku Kameda told MNI.
• “Whether market players and the Fed agree with the outlook for the US economy at the FOMC in November is the key for whether the BoJ will get a chance to raise the policy rate in December,” said Kameda, now executive economist at Sompo Institute Plus, the insurance giant’s research arm.
• Cash US tsys are 1-2bps cheaper in today’s Asia-Pac session after yesterday’s ADP-induced bear flattener. Today’s US calendar will see Weekly Claims, Factory/Durable Goods Orders and ISM Services, followed by Friday's headline Non-Farm Payrolls for September. (See MNI Employment Preview here)
• Beyond the 1-year (+4bps), cash JGBs are little changed out to the 20-year and 1bp cheaper beyond. The benchmark 10-year yield is 0.3bp lower at 0.823% after hitting a high of 0.837% early.
• Swap rates are flat to slightly lower across maturities, apart from the 20-year (+3.5bp). Swap spreads are tighter apart from the 20-year.
• Tomorrow, the local calendar is empty.