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JGBS: Mixed Ahead Of US ADP Data, Heavy Calendar Tomorrow Incl BoJ Decision

JGBS
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JGB futures are stronger and at session highs, +11 compared to settlement levels.

  • Today, the local calendar has been light.
  • Tomorrow, the BoJ will hand down its policy decision after its two-day MPM. All, but one of the 53 analysts surveyed by Bloomberg expect the current policy rate of 0.25% to be maintained, with market pricing aligning with this expectation.
  • Since April, the BoJ’s guidance has indicated a gradual rate increase if economic activity and inflation trends align with the central bank’s projections.
  • However, an additional precondition for future rate hikes has emerged, emphasising stability in overseas economies and financial markets. Given these factors, the BoJ appears inclined to monitor US economic stability and market volatility a bit longer before making further policy adjustments. (See MNI BoJ Preview here)
  • Cash US tsys are little changed in today’s Asia-Pac session. The focus is now on today's ADP employment and GDP data.
  • Cash JGBs are slightly mixed across benchmarks, with yields 1-2bps richer apart from the 1-year and 20-year+, which are 1-2bps cheaper. The benchmark 10-year yield is 1.5bps lower at 0.966%.
  • Swap rates are 1-3bps lower, with the belly of the curve leading. 
  • Tomorrow, the local calendar will also see Retail Sales, International Investment Flow, IP and Housing Starts data.
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JGB futures are stronger and at session highs, +11 compared to settlement levels.

  • Today, the local calendar has been light.
  • Tomorrow, the BoJ will hand down its policy decision after its two-day MPM. All, but one of the 53 analysts surveyed by Bloomberg expect the current policy rate of 0.25% to be maintained, with market pricing aligning with this expectation.
  • Since April, the BoJ’s guidance has indicated a gradual rate increase if economic activity and inflation trends align with the central bank’s projections.
  • However, an additional precondition for future rate hikes has emerged, emphasising stability in overseas economies and financial markets. Given these factors, the BoJ appears inclined to monitor US economic stability and market volatility a bit longer before making further policy adjustments. (See MNI BoJ Preview here)
  • Cash US tsys are little changed in today’s Asia-Pac session. The focus is now on today's ADP employment and GDP data.
  • Cash JGBs are slightly mixed across benchmarks, with yields 1-2bps richer apart from the 1-year and 20-year+, which are 1-2bps cheaper. The benchmark 10-year yield is 1.5bps lower at 0.966%.
  • Swap rates are 1-3bps lower, with the belly of the curve leading. 
  • Tomorrow, the local calendar will also see Retail Sales, International Investment Flow, IP and Housing Starts data.