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JGBS: Richer Despite PPI Services Beat, 40Y Supply Tomorrow

JGBS
BulletAPACFixed Income BulletsJapanMarkets

JGB futures are stronger and near Tokyo session highs, +15 compared to settlement levels, after reversing early losses seen after the PPI Services beat. 

  • Outside of the previously outlined PPI Services, there hasn't been much by way of domestic drivers to flag.
  • Japan shouldn’t rush changes in monetary and fiscal policies, according to Yuichiro Tamaki, head of Democratic Party for the People. Tightening policy too much can send Japan back to deflation, Tamaki said Tuesday at a press conference. (per BBG)
  • Cash US tsys are 1-2bps cheaper in today’s Asia-Pac session after news of President-elect Donald Trump’s threat to add another 10% to existing tariffs on China and impose 25% import tariffs on Canada and Mexico.
  • Today in the US will see FOMC minutes after a string of hawkish Fedspeak and 5Y supply. It’s followed by GDP/PCE data and 7Y supply on Wed before Thanksgiving closures.
  • Cash JGBs are 1-2bps richer across benchmarks, with a slight flattening bias. The benchmark 10-year yield is 1.6bps lower at 1.060% versus the cycle high of 1.108%.
  • The swaps curve has twist-steepened, pivoting at the 20-year, with rates 1bp lower to 3bps higher. Swap spreads are generally wider.
  • Tomorrow, the local calendar is empty apart from 40-year supply.
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JGB futures are stronger and near Tokyo session highs, +15 compared to settlement levels, after reversing early losses seen after the PPI Services beat. 

  • Outside of the previously outlined PPI Services, there hasn't been much by way of domestic drivers to flag.
  • Japan shouldn’t rush changes in monetary and fiscal policies, according to Yuichiro Tamaki, head of Democratic Party for the People. Tightening policy too much can send Japan back to deflation, Tamaki said Tuesday at a press conference. (per BBG)
  • Cash US tsys are 1-2bps cheaper in today’s Asia-Pac session after news of President-elect Donald Trump’s threat to add another 10% to existing tariffs on China and impose 25% import tariffs on Canada and Mexico.
  • Today in the US will see FOMC minutes after a string of hawkish Fedspeak and 5Y supply. It’s followed by GDP/PCE data and 7Y supply on Wed before Thanksgiving closures.
  • Cash JGBs are 1-2bps richer across benchmarks, with a slight flattening bias. The benchmark 10-year yield is 1.6bps lower at 1.060% versus the cycle high of 1.108%.
  • The swaps curve has twist-steepened, pivoting at the 20-year, with rates 1bp lower to 3bps higher. Swap spreads are generally wider.
  • Tomorrow, the local calendar is empty apart from 40-year supply.