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JGBS: Little Changed, FOMC Tonight, BoJ Policy Decision Tomorrow

JGBS
BulletAPACFixed Income BulletsJapanMarkets

JGB futures are stronger, +10 compared to settlement levels.

  • Outside of the previously outlined trade balance data, there hasn't been much by way of domestic drivers to flag.
  • The focus remains on tomorrow’s BoJ policy decision, with the broad consensus expecting no change to policy settings.
  • Towards late November, market pricing for the meeting outcome stood at over 60% in terms of a 25bps hike priced in. This has fallen back sharply though as we have gotten closer to the meeting date, last around 14% probability priced for a full rate hike.
  • In terms of what has shifted sentiment around the likely meeting outcome, it has more reflected press articles, along with BoJ commentary, as opposed to shifts in data outcomes. (See MNI BoJ Preview here)
  • Cash US tsys are ~1bp richer in today’s Asia-Pac session ahead of today's FOMC policy decision.
  • Cash JGBs are slightly richer across benchmarks. The benchmark 10-year yield is 0.1bp lower at 1.083% 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.
  • Tomorrow, the local calendar will also see Weekly International Flow and Tokyo Condominiums For Sale data.
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JGB futures are stronger, +10 compared to settlement levels.

  • Outside of the previously outlined trade balance data, there hasn't been much by way of domestic drivers to flag.
  • The focus remains on tomorrow’s BoJ policy decision, with the broad consensus expecting no change to policy settings.
  • Towards late November, market pricing for the meeting outcome stood at over 60% in terms of a 25bps hike priced in. This has fallen back sharply though as we have gotten closer to the meeting date, last around 14% probability priced for a full rate hike.
  • In terms of what has shifted sentiment around the likely meeting outcome, it has more reflected press articles, along with BoJ commentary, as opposed to shifts in data outcomes. (See MNI BoJ Preview here)
  • Cash US tsys are ~1bp richer in today’s Asia-Pac session ahead of today's FOMC policy decision.
  • Cash JGBs are slightly richer across benchmarks. The benchmark 10-year yield is 0.1bp lower at 1.083% 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.
  • Tomorrow, the local calendar will also see Weekly International Flow and Tokyo Condominiums For Sale data.