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JGBS: Futures Gap Lower After Today’s Local Data Drop

JGBS
BulletAPACFixed Income BulletsJapanMarkets

In Tokyo morning trade, JGB futures gapped weaker, -10 compared to settlement levels, after this morning’s local data drop.

  • The core CPI (excluding fresh food) in the Tokyo area, a leading indicator of the national average, registered a 2.2% increase in November, up from the 1.8% growth in October. The core-core CPI (excluding fresh food and energy) -- a key indicator of the underlying trend of inflation -- rose 1.9% y/y in November, quicker than the 1.8% y/y registered previously.
  • The retail sales print was slightly below expectations at 0.1%m/m, versus 0.4% forecast. The Sep dip was revised up slightly. The y/y print came in at 1.6%, also below expectations but above Sep's 0.7% outcome.
  • IP for Oct (preliminary) was also a little below forecast at 3.0%m/m, versus 4.0% forecast. In y/y terms we were at 1.6% also sub the 2.0% forecast.
  • The authorities will again be pushing for strong wage gains in 2025 to aid the real household wage and spending outlook.
  • Cash US tsys have opened 1-2bps richer in today’s Asia-Pac session after yesterday’s holiday.
  • Cash JGBs are flat to 1bp cheaper across benchmarks. The benchmark 2-year yield is 0.8bps higher at 0.590% ahead of today’s supply
  • The swaps curve has bear-steepened, with rates 1-5bps higher. Swap spreads are mostly wider. 
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In Tokyo morning trade, JGB futures gapped weaker, -10 compared to settlement levels, after this morning’s local data drop.

  • The core CPI (excluding fresh food) in the Tokyo area, a leading indicator of the national average, registered a 2.2% increase in November, up from the 1.8% growth in October. The core-core CPI (excluding fresh food and energy) -- a key indicator of the underlying trend of inflation -- rose 1.9% y/y in November, quicker than the 1.8% y/y registered previously.
  • The retail sales print was slightly below expectations at 0.1%m/m, versus 0.4% forecast. The Sep dip was revised up slightly. The y/y print came in at 1.6%, also below expectations but above Sep's 0.7% outcome.
  • IP for Oct (preliminary) was also a little below forecast at 3.0%m/m, versus 4.0% forecast. In y/y terms we were at 1.6% also sub the 2.0% forecast.
  • The authorities will again be pushing for strong wage gains in 2025 to aid the real household wage and spending outlook.
  • Cash US tsys have opened 1-2bps richer in today’s Asia-Pac session after yesterday’s holiday.
  • Cash JGBs are flat to 1bp cheaper across benchmarks. The benchmark 2-year yield is 0.8bps higher at 0.590% ahead of today’s supply
  • The swaps curve has bear-steepened, with rates 1-5bps higher. Swap spreads are mostly wider.