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JGBS: Futures Stronger Overnight On Friday, BOJ Ueda Speech & Presser Today

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In post-Tokyo trade ahead of the weekend, JGB futures were stronger, +7 compared to settlement levels, after US tsys rallied off session cheaps as US equities weakened. The US 10-year rate was fractionally higher by the close at 4.44% after testing 4.50% early in Friday’s NY session. The US 2-year finished 4bps lower at 4.30% as rate-cut bets crept back in. 

  • There was fast two-way trade for US tsys after higher-than-expected Retail Sales for October and up-revisions for the prior. Meanwhile, import/export price indexes came out higher than expected, while Empire Mfg jumped to late 2021 levels.
  • Today, the local calendar will see Core Machine Orders data alongside BOJ Rinabn operation covering 1-3-year and 5-25-year OTR JGBs. The market expects a 1.5%m/m rise (prior -1.9%).
  • Friday's National CPI for October is likely to be the next major focus point. Domestic-related services inflation will be eyed.
  • Greater focus today will rest on BoJ Governor Ueda's speech. Reuters notes the Governor will speak to business executives from the city at 10-11:30am local time (which is 0100-0230GMT), then will hold a press conference from 1:45pm-2:15pm local time (0445-0515GMT). Hints around the rate outlook will be eyed closely.
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In post-Tokyo trade ahead of the weekend, JGB futures were stronger, +7 compared to settlement levels, after US tsys rallied off session cheaps as US equities weakened. The US 10-year rate was fractionally higher by the close at 4.44% after testing 4.50% early in Friday’s NY session. The US 2-year finished 4bps lower at 4.30% as rate-cut bets crept back in. 

  • There was fast two-way trade for US tsys after higher-than-expected Retail Sales for October and up-revisions for the prior. Meanwhile, import/export price indexes came out higher than expected, while Empire Mfg jumped to late 2021 levels.
  • Today, the local calendar will see Core Machine Orders data alongside BOJ Rinabn operation covering 1-3-year and 5-25-year OTR JGBs. The market expects a 1.5%m/m rise (prior -1.9%).
  • Friday's National CPI for October is likely to be the next major focus point. Domestic-related services inflation will be eyed.
  • Greater focus today will rest on BoJ Governor Ueda's speech. Reuters notes the Governor will speak to business executives from the city at 10-11:30am local time (which is 0100-0230GMT), then will hold a press conference from 1:45pm-2:15pm local time (0445-0515GMT). Hints around the rate outlook will be eyed closely.