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JGBS: Subdued Dealings In A Data-Light Session

JGBS
Bullet

JGB futures are holding stronger and near the mid-point of today’s Tokyo session range, +9 compared to settlement levels.

  • Coincident & Leading Indices have just printed at 115.3 and 109.1 respectively.
  • Today, the local calendar will also see Nationwide Dept Sales alongside an Enhanced Liquidity Auction covering 1-5-year JGBs.
  • Cash US tsys are 3-5bps richer in today’s Asia-Pac session after Trump announced Bessent as Treasury Secretary. Bessent is seen as a Fiscal Hawk, with consensus thinking he will be positive overall for the economy and markets.
  • The swap markets gives a better-than-even chance of the BOJ lifting its benchmark interest rate next month.
  • “Interest rates strategists are concerned about a potential spike in yields because they judge that a move by the BOJ at its Dec. 18-19 meeting would bring another increase into view as soon as April, and investors have not positioned for this yet.” (per BBG)
  • Cash JGBs are flat to 1bp richer across benchmarks beyond the 1-year.
  • Swap rates are flat to 1bp lower out to the 10-year but 4bps higher for the 20-30-year zone. Swap spreads are little changed apart from the 4bps widening in the 20-30-year zone.
  • Tomorrow, the local calendar will see PPI Services data. 
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JGB futures are holding stronger and near the mid-point of today’s Tokyo session range, +9 compared to settlement levels.

  • Coincident & Leading Indices have just printed at 115.3 and 109.1 respectively.
  • Today, the local calendar will also see Nationwide Dept Sales alongside an Enhanced Liquidity Auction covering 1-5-year JGBs.
  • Cash US tsys are 3-5bps richer in today’s Asia-Pac session after Trump announced Bessent as Treasury Secretary. Bessent is seen as a Fiscal Hawk, with consensus thinking he will be positive overall for the economy and markets.
  • The swap markets gives a better-than-even chance of the BOJ lifting its benchmark interest rate next month.
  • “Interest rates strategists are concerned about a potential spike in yields because they judge that a move by the BOJ at its Dec. 18-19 meeting would bring another increase into view as soon as April, and investors have not positioned for this yet.” (per BBG)
  • Cash JGBs are flat to 1bp richer across benchmarks beyond the 1-year.
  • Swap rates are flat to 1bp lower out to the 10-year but 4bps higher for the 20-30-year zone. Swap spreads are little changed apart from the 4bps widening in the 20-30-year zone.
  • Tomorrow, the local calendar will see PPI Services data.