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Off Worst Levels, Futures Back To Flat, Awaiting US Payrolls

JGBS

JGB futures are little changed, +1 compared to the settlement levels, after spending most of today’s session in the red.

  • There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined household spending and current account data. Leading & Coincident Indices are due later today.
  • (Bloomberg) -- Japan’s annual wage negotiations are nearing a conclusion, drawing intense scrutiny as the BoJ looks for evidence of a virtuous wage-price cycle that would allow it to exit from the world’s last negative rate regime. (See link)
  • Results from today’s BoJ Rinban operations covering 1- to 10-year JGBs showed positive spreads and elevated off-cover ratios. Nevertheless, JGBS moved away from the session’s worst levels.
  • Cash US tsys are dealing little changed in today’s Asia-Pac session ahead of US Non-Farm Payrolls later today.
  • Cash JGBs are still cheaper, with the 20-year zone as the underperformer (+1.8bps). The benchmark 10-year yield is 0.2bps higher at 0.733% versus the February high of 0.772%.
  • The 2-year JGB yield earlier rose to 0.2% for the first time since 2011. It currently sits at 0.197%.
  • Swap rates are slightly lower, with swap spreads tighter.
  • On Monday, the local calendar sees Q4 F GDP, February Money Stock M2 & M3 and February Machine Tool Orders data.

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