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JGBS: Futures Near Session Lows, US PPI & Claims Data Due, Q3 GDP Tomorrow

JGBS
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JGB futures are holding weaker and near Tokyo session lows, -12 compared to settlement levels.

  • Outside of the previously outlined weekly international investment flows, there hasn't been much by way of domestic drivers to flag.
  • BOJ Deputy Governor Shinichi Uchida said the nation’s financial system has been maintaining stability with banks having sufficient capital bases and stable funding.
  • Cash US tsys are 2-3bps cheaper in today’s Asia-Pac session after yesterday’s twist-steepening. The US calendar sees PPI and jobless claims data later today.
  • Cash JGBs have bear—steepened across benchmarks beyond the 1-year (+3.1bps), with yields flat to 3bps higher. The benchmark 10-year yield is 1.1bps higher at 1.061% versus the cycle high of 1.108%.
  • The yield on the 30-year JGB rose as high 2.312% today, its highest level since March 2010. This came despite yesterday’s supply being comfortably absorbed. The 30-year auction saw the low price beat dealer expectations and the cover ratio edge up to 3.4353x from 3.3438x. However, the auction tail did lengthen.
  • Swap rates are flat to 5bps higher, with a steeper curve. Swap spreads are mixed.
  • Tomorrow, the local calendar will see Q3 GDP, Industrial Production, Capacity Utilization and Tertiary Industry Index data alongside 5-year supply.
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JGB futures are holding weaker and near Tokyo session lows, -12 compared to settlement levels.

  • Outside of the previously outlined weekly international investment flows, there hasn't been much by way of domestic drivers to flag.
  • BOJ Deputy Governor Shinichi Uchida said the nation’s financial system has been maintaining stability with banks having sufficient capital bases and stable funding.
  • Cash US tsys are 2-3bps cheaper in today’s Asia-Pac session after yesterday’s twist-steepening. The US calendar sees PPI and jobless claims data later today.
  • Cash JGBs have bear—steepened across benchmarks beyond the 1-year (+3.1bps), with yields flat to 3bps higher. The benchmark 10-year yield is 1.1bps higher at 1.061% versus the cycle high of 1.108%.
  • The yield on the 30-year JGB rose as high 2.312% today, its highest level since March 2010. This came despite yesterday’s supply being comfortably absorbed. The 30-year auction saw the low price beat dealer expectations and the cover ratio edge up to 3.4353x from 3.3438x. However, the auction tail did lengthen.
  • Swap rates are flat to 5bps higher, with a steeper curve. Swap spreads are mixed.
  • Tomorrow, the local calendar will see Q3 GDP, Industrial Production, Capacity Utilization and Tertiary Industry Index data alongside 5-year supply.