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JGBS: Muted Session, Solid 30Y Auction, Heavy US Calendar Later In Week

JGBS
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In Tokyo morning trade, JGB futures are holding a downtick, -2 compared to settlement levels, after initial post-30Y-supply strength was reversed.

  • Today’s 30-year supply was well absorbed, with the low price beating dealer expectations, the cover ratio steady and the auction tail shortening.
  • Outside of the previously outlined labour cash earnings and current account balance data, there hasn't been much by way of domestic drivers to flag.
  • Cash US tsys are 2-4bps richer, with a steepening bias, in today’s Asia-Pac session after Fed's Musalem stated that the current monetary policy path remains appropriate despite recent jobs data.
  • We have limited US data today, with the focus on the minutes for the September FOMC tomorrow, CPI on Thursday and PPI on Friday.
  • Cash JGBs are mixed across benchmarks beyond the 1-year (+1.9bps), with yield swings bounded by +/- 1bp. The belly of the curve has outperformed with the benchmark 7-year yield ~1bp lower at 0.656%. The 30-year yield is unchanged at 2.126% versus a pre-auction high of 2.1430%.
  • The swaps curve has twist-steepened, with rates 1bp lower to 1bp higher.
  • Tomorrow, the local calendar will see Machine Tool Orders.
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In Tokyo morning trade, JGB futures are holding a downtick, -2 compared to settlement levels, after initial post-30Y-supply strength was reversed.

  • Today’s 30-year supply was well absorbed, with the low price beating dealer expectations, the cover ratio steady and the auction tail shortening.
  • Outside of the previously outlined labour cash earnings and current account balance data, there hasn't been much by way of domestic drivers to flag.
  • Cash US tsys are 2-4bps richer, with a steepening bias, in today’s Asia-Pac session after Fed's Musalem stated that the current monetary policy path remains appropriate despite recent jobs data.
  • We have limited US data today, with the focus on the minutes for the September FOMC tomorrow, CPI on Thursday and PPI on Friday.
  • Cash JGBs are mixed across benchmarks beyond the 1-year (+1.9bps), with yield swings bounded by +/- 1bp. The belly of the curve has outperformed with the benchmark 7-year yield ~1bp lower at 0.656%. The 30-year yield is unchanged at 2.126% versus a pre-auction high of 2.1430%.
  • The swaps curve has twist-steepened, with rates 1bp lower to 1bp higher.
  • Tomorrow, the local calendar will see Machine Tool Orders.