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JGBS: Holding A Bear-Flattener After Today’s Core CPI Data

JGBS
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JGB futures are holding weaker, -16 compared to settlement levels, after this morning National CPI data printed core measures above expectations. 

  • Japan’s Headline National CPI for September printed in line with expectations at +2.5% y/y versus +3.0% prior. However, the Core and Core-Core measures printed above expectations at +2.4% y/y and +2.1% y/y respectively versus estimates of +2.3% and +2.0% and priors +2.8% and +2.0%.
  • “Daido Life Insurance Co. will buy more long-term bonds if yield on 30-year Japanese government debt rises to around 2.5% in second half of fiscal year, according to an investment briefing by the insurer on Friday.” (per BBG)
  • Cash US Treasuries are slightly mixed in today’s Asia-Pacific session, following yesterday’s sharp bear-steepening. Friday’s data calendar is relatively light, with housing starts and building permits being the key releases. However, several Fed speakers are lined up, including Bostic, Kashkari, Waller, and Bostic.
  • Cash JGBs are flat to 4bps cheaper across benchmarks, with the curve flatter. The benchmark 10-year yield is 1bp higher at 0.979% versus the cycle high of 1.108%.
  • Swap rates are 1-5bps higher, with the curve also steeper. Swap spreads are tighter out to the 7-year and wider beyond.
  • The local calendar is light on Monday with Tokyo Condominiums for Sale as the sole release. 
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JGB futures are holding weaker, -16 compared to settlement levels, after this morning National CPI data printed core measures above expectations. 

  • Japan’s Headline National CPI for September printed in line with expectations at +2.5% y/y versus +3.0% prior. However, the Core and Core-Core measures printed above expectations at +2.4% y/y and +2.1% y/y respectively versus estimates of +2.3% and +2.0% and priors +2.8% and +2.0%.
  • “Daido Life Insurance Co. will buy more long-term bonds if yield on 30-year Japanese government debt rises to around 2.5% in second half of fiscal year, according to an investment briefing by the insurer on Friday.” (per BBG)
  • Cash US Treasuries are slightly mixed in today’s Asia-Pacific session, following yesterday’s sharp bear-steepening. Friday’s data calendar is relatively light, with housing starts and building permits being the key releases. However, several Fed speakers are lined up, including Bostic, Kashkari, Waller, and Bostic.
  • Cash JGBs are flat to 4bps cheaper across benchmarks, with the curve flatter. The benchmark 10-year yield is 1bp higher at 0.979% versus the cycle high of 1.108%.
  • Swap rates are 1-5bps higher, with the curve also steeper. Swap spreads are tighter out to the 7-year and wider beyond.
  • The local calendar is light on Monday with Tokyo Condominiums for Sale as the sole release.