September 13, 2024 00:36 GMT
JGBS: Firmer With US Tsys, 10yr JGB Yield Close To 200-day MA
JGBS
JGB futures (JBZ4) have pushed higher since the open. We were last 144.67, +.13 versus settlement levels. Positive spill over is evident from the move higher in US TSY futures, as speculation continues on the size of the first Fed cut next week.
- For JGB futures this week's highs rest at 144.86. Beyond that earlier highs rest near 145.00. We also have 145.95/146.67 - High Aug 6 / High Mar 6. The technical backdrop for futures remains bullish.
- In the cash JGB space, the weakest part of the curve is in the 10-20yr tenors, both off around 2-2.5bps. The 10yr JGB yield is back to 0.85%. This leaves us nearing the simple 200-day MA in yield terms, see the chart below. Dips below this support point haven't been sustained in recent years, see the chart below.
- In the swap space, we are lower by around 2bps for 7-30yr tenors. The 10yr is back to 0.8725%.
- With only a 3 month bill sale on tap today, coupled with final July IP, JGB sentiment is likely to be dictated by US TSY moves.
Fig 1: 10yr JGB Yield Close To 200-day MA Support
Source: MNI - Market News/Bloomberg
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