JGBS: Cash Curve Bull Flattener Ahead Of US Payrolls

JGB futures are at session highs, +12 compared to the settlement levels. 

• Outside of the previously outlined household spending data, there hasn't been much by way of domestic drivers to flag.
• (Bloomberg) "The Bank of Japan may hike interest rates faster than many currently anticipate, and it should strive to better telegraph those moves to ensure markets don’t panic, according to a former official." (See link)
• Cash US tsys are 1-2bps richer in today’s Asia-Pac session ahead of US Non-Farm Payrolls data later today (our preview ishere). We will also hear from the FOMC's Williams, Goolsbee and Waller ahead of the pre-September meeting blackout starting this weekend.
• The cash JGB curve has twist-flattened, pivoting at the 4-year, with yields 1bp higher to 3bps lower. The benchmark 10-year yield is 1.4bps lower at 0.866% versus the cycle high of 1.108%.
• The stronger performance of longer-dated JGBs is consistent with today's Rinban Operations results, which showed lower offer cover ratios.
• The swap rates are little changed.
• The local calendar will also see Coincident & Leading Indices later today.
• On Monday, the local calendar will see GDP (Final), Trade Balance and Bank Lending data.