JGBS: Futures Weaker Overnight, Q3 GDP & 5Y Supply Due

In post-Tokyo trade, JGB futures are weaker, -9 compared to settlement levels after US tsys (and stocks) traded weaker as the prepared text from Chairman Powell's comments on the economy from Dallas aired. 

• Cash US tsys finished with a twist-flattening, with benchmark yields 7bps higher to 4bps lower, pivoting at the 10-year.
• Chair Powell's speech contained several quotes that sound similar to what he said at last week's press conference. As such, nothing really "new", but by the same token there is nothing dovish here, which may help explain the hawkish market reaction.
• We feel like our policy is restrictive, we can't say exactly how restrictive. We've started the process of moving down toward neutral. The way to find that level is carefully and patiently. Policy works with long and variable lags, and that makes it more difficult to know when you arrive at neutral.
• US projected rate cuts into early 2025 moderated slightly from Thursday's morning. Current levels vs. this morning (*) : Dec'24 cumulative -16.4bp (-19.8bp), Jan'25 -23.9bp (-27.8bp), Mar'25 -38.2bp (-42.4bp), May'25 -43.8bp (-49.9bp).
• Today, the local calendar will see Q3 GDP, Industrial Production, Capacity Utilization and Tertiary Industry Index data alongside 5-year supply.