Free Trial

The Steepening Extends

JGBS

Curve steepening has extended through the Tokyo day, with 20+-Year JGB yields running 3.0-8.0bp higher, aided by the previously outlined show higher in U.S. Tsy yields and the BoJ’s choice to refrain from deploying another round of off-schedule Rinban purchases.

  • Paper out to 10s is little changed, anchored by the BoJ’s YCC mechanism, which promotes a steeper curve in a bearish bond environment.
  • JGB futures are a touch lower vs. levels seen at the end of the overnight session, last +4 vs. yesterday’s settlement, hugging a tight range. Participants are seemingly unwilling to test the BoJ’s resolve via a retest of June’s bearish extremes in the contract given the (ultimately successful) BoJ defences deployed at that time.
  • 2-Year JGB supply and the weekly international security flow data headline tomorrow’s domestic docket.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.