US TSYS: Cash Bonds Extend Yesterday’s Strong Rally

In Tokyo morning trade, JGB futures are weaker, -14 compared to settlement levels.

• BoJ Governor Ueda warned that rising geopolitical tensions will test the resilience of Asian emerging markets. He noted that global economic fragmentation could further widen monetary policy divergences and that escalating tensions may lead to sudden reversals in cross-border capital flows.
• S&P Global PMIs for February have printed: Composite Index rose to 52 from 51.1 in January, and Services Index rose to 53.7 from 53 in January.
• Today, the local calendar will also see BoJ Rinban Operations covering 1-5-year and 10-25-year JGBs. BoJ Deputy Governor Uchida will also give a speech in Shizuoka.
• Cash US tsys are 1-2bps richer in today’s Asia-Pac session after yesterday’s heavy session.
• Cash JGBs are flat to 2bps cheaper across benchmarks, with a steepening bias. The benchmark 10-year yield is 1.6bps higher at 1.441% versus the cycle high of 1.466%.
• Swap rates are 1-3bps higher. Swap spreads are wider.

Q4 GDP printed exactly in line with consensus at +0.6% q/q & 1.3% y/y up from 0.3% & 0.8% in Q3. Public, private and overseas demand contributed to growth. See ABS press release here. More details to follow. 

• MNI: AUSTRALIA Q4 GDP +0.6% Q/Q
• MNI: AUSTRALIA Q4 GDP +1.3% Y/Y