JGBS: Richer But Off Bests, 5Y Supply Tomorrow

JGB futures are stronger but off session highs, +15 compared to the settlement levels.

• Outside of the previously outlined GDP, Trade Balance and Bank Lending data, there hasn't been much by way of domestic drivers to flag.
• BOJ Governor Kazuo Ueda is expected to closely examine economic data including its Tankan survey on Dec. 13 before the central bank’s Dec. 19 policy decision. Most economists surveyed last month foresaw an interest rate hike by January, while Ueda said in a recent interview with the Nikkei newspaper that the timing for a hike is “nearing,” fueling speculation that the bank may increase rates this month.  (per BBG)
• Cash US tsys are flat to 1bp richer in today’s Asia-Pac session after Friday’s modest post-payrolls gains. The focus is this week's CPI and PPI inflation data on Wednesday and Thursday respectively. As a reminder, the Federal Reserve entered its self-imposed blackout at midnight Friday through December 19.
• Cash JGBs are 1-2bps richer across benchmarks, with the futures linked 7-year leading. The benchmark 10-year yield is 1.3bps lower at 1.047% versus the cycle high of 1.108%.
• Swap rates are 1-3bps lower out to the 10-year and 2bps higher in the 20-30-year zone. Swap spreads are mixed.
• Tomorrow, the local calendar will see M2 & M3 Money Stock and Machine Tool Orders data alongside 5-year supply.