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JGBS: Futures Weaker Overnight With US Tsys After US CPI Data

JGBS
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In post-Tokyo trade, JGB futures are weaker, -6 compared to settlement levels, after US CPI data drove US tsy yields higher and the curve flatter. The 2-year was 5bps higher at 3.64% after hitting a new 2-year low earlier in the session. The 10-year was up 1bp at 3.65% in spite of a very successful auction. The curve closed in positive territory for a fourth straight day. 

  • US Core CPI surprised higher in August on a housing inflation rebound, rising 0.281% last month against expectations for a 0.2% increase. The annual rates for Headline and Core CPI were 2.5% and 3.2% respectively.
  • Projected rate cuts through year end remain soft vs. pre-data levels (*): Sep'24 cumulative -28.5bp (-32.7bp), Nov'24 cumulative -65.1bp (-72.5bp), Dec'24 -105.3bp (-114.5bp).
  • After dropping over -1.0% in early trading, US equities surged on dip buying.  The NASDAQ advanced ~2%, with the S&P 500 closing with a 1% gain.
  • The focus now turns to today's US PPI and Weekly Claims data.
  • Locally today we have the Q3 BSI sentiment survey, along with the Aug PPI. Weekly foreign investment flows are also due, as is more BoJ (Tamura) speak (10am local time).
  • The MoF also plans to sell Y1.0trn 20-year JGBs. 
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In post-Tokyo trade, JGB futures are weaker, -6 compared to settlement levels, after US CPI data drove US tsy yields higher and the curve flatter. The 2-year was 5bps higher at 3.64% after hitting a new 2-year low earlier in the session. The 10-year was up 1bp at 3.65% in spite of a very successful auction. The curve closed in positive territory for a fourth straight day. 

  • US Core CPI surprised higher in August on a housing inflation rebound, rising 0.281% last month against expectations for a 0.2% increase. The annual rates for Headline and Core CPI were 2.5% and 3.2% respectively.
  • Projected rate cuts through year end remain soft vs. pre-data levels (*): Sep'24 cumulative -28.5bp (-32.7bp), Nov'24 cumulative -65.1bp (-72.5bp), Dec'24 -105.3bp (-114.5bp).
  • After dropping over -1.0% in early trading, US equities surged on dip buying.  The NASDAQ advanced ~2%, with the S&P 500 closing with a 1% gain.
  • The focus now turns to today's US PPI and Weekly Claims data.
  • Locally today we have the Q3 BSI sentiment survey, along with the Aug PPI. Weekly foreign investment flows are also due, as is more BoJ (Tamura) speak (10am local time).
  • The MoF also plans to sell Y1.0trn 20-year JGBs.