MNI China Daily Summary: Friday, January 10

MNI BRIEF: China To Adopt Very Proactive Fiscal Policy-Offical

CANADA LIBERAL LEADERHIP VOTE TO REPLACE TRUDEAU SET FOR MAR 9

MNI BRIEF: PBOC Suspends Bonds Trades As Yields Drop

MNI: PBOC Net Drains CNY14.8 Bln via OMO Friday

MNI: PBOC Sets Yuan Parity Higher At 7.1891 Fri; -2.36% Y/Y

MNI: CANADIAN NOV BUILDING PERMITS -5.9% MOM

US DEC UNEMPLOYMENT RATE 4.086%

MNI: US DEC NONFARM PAYROLLS +256K; PRIVATE +223K, GOVT +33K

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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JGBS: Little Changed, Range-Bound Session Ahead Of US Payrolls

JGBS
BulletAPACFixed Income BulletsJapanMarkets

JGB futures are weaker, -11 compared to settlement levels, after a range-bound session. 

  • Outside of the previously outlined household spending, there hasn't been much by way of domestic drivers to flag. The positive surprise on real spending will be welcomed by the authorities, but spending has remained largely negative in y/y terms for the past 2 years.
  • Today's data is unlikely to shift near-term BoJ thinking. They have time to assess such trends and await early 2025 wages outcomes.
  • BOJ-dated OIS pricing is 1-6bps softer across meetings compared to pre-December MPM levels, with January 2025 leading the decline.
  • Market expectations currently indicate: a 28% probability of a 25bp hike in January; a cumulative 82% chance by May; and a full 25bp increase not fully priced in until June 2025.
  • Cash US tsys are slightly richer in today’s Asia-Pac session ahead of tonight’s US Nonfarm Payrolls.
  • Cash JGBs are little changed across benchmarks. The benchmark 10-year yield is 0.5bp higher at 1.189%, just shy of the fresh cycle high of 1.192% set early today.
  • The swaps curve has twist-steepened, pivoting at the 20-year, with rates 2bps lower to 3bps wider.
  • The local market is closed on Monday for the Coming-of-Age Day holiday.
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JGB futures are weaker, -11 compared to settlement levels, after a range-bound session. 

  • Outside of the previously outlined household spending, there hasn't been much by way of domestic drivers to flag. The positive surprise on real spending will be welcomed by the authorities, but spending has remained largely negative in y/y terms for the past 2 years.
  • Today's data is unlikely to shift near-term BoJ thinking. They have time to assess such trends and await early 2025 wages outcomes.
  • BOJ-dated OIS pricing is 1-6bps softer across meetings compared to pre-December MPM levels, with January 2025 leading the decline.
  • Market expectations currently indicate: a 28% probability of a 25bp hike in January; a cumulative 82% chance by May; and a full 25bp increase not fully priced in until June 2025.
  • Cash US tsys are slightly richer in today’s Asia-Pac session ahead of tonight’s US Nonfarm Payrolls.
  • Cash JGBs are little changed across benchmarks. The benchmark 10-year yield is 0.5bp higher at 1.189%, just shy of the fresh cycle high of 1.192% set early today.
  • The swaps curve has twist-steepened, pivoting at the 20-year, with rates 2bps lower to 3bps wider.
  • The local market is closed on Monday for the Coming-of-Age Day holiday.