JGBS: Thursday lows Hold, Positive Spill Over From US TSYs Eyed

JGB futures (JBZ4) ended Thursday trade at 144.53, -.01 versus settlement levels. Earlier Thursday lows sub 144.00, which came amid hawkish BoJ rhetoric/mixed 20yr auction results, remained intact. 

• Offshore influences were heavier from a EU standpoint, with the ECB cutting rates as expected, but not committing to any predetermined outlook. In the US, we saw initial movement with the EU lead, but fresh media speculation (WSJ/FT) on a potential 50bps cut next week saw futures spike higher.
• The early impetus to 10yr US Tsy futures is higher in Friday dealings, which may lend some support to JGB futures. 
• In terms of cash JGB yields we had the 10yr finish under 0.87% on Thursday. In the swap rate space, the latest moves are skewed modestly lower. (10yr last under 0.89%).
• On the data calendar today we have final July IP out, which is unlikely to move market sentiment. There is also a 3 month debt sale.
• Focus is turning to next Friday's BoJ decision, although a recent Bloomberg survey indicated no economists expect a hike next week, with around half surveyed seeing the next rate move in December. See this link.