BUND TECHS: (M5) Bullish Trend Structure

JGB futures are stronger, +16 compared to settlement levels, but off the session’s best level.

• The local data calendar has been empty today.
• The market’s focus is on Wednesday’s BoJ decision. The BoJ is widely expected to maintain its policy rate at 0.50%. The BoJ’s January rate hike marked a significant policy shift, bringing short-term rates to levels unseen since 2008. However, policymakers do not appear to see an urgent need for another increase at the March meeting.
• Market expectations point to a gradual path toward policy normalisation. The BoJ is projected to raise its policy rate to 0.75% by July or September and to reach 1.0% by the first quarter of 2026.
• Cash US tsys are flat to 1bp richer in today’s Asia-Pac session after Friday’s modest sell-off. The Fed remains in Blackout until after Wednesday's FOMC policy announcement. Monday's US data highlight is Retail Sales.
• Cash JGBs are 2bps richer to 7bps cheaper across benchmarks, with a steepening bias. The benchmark 10-year yield is 0.2bps higher at 1.518% versus the cycle high of 1.58%.
• Swap rates are 1bp lower to 3bps higher. Swap spreads are mixed.
• Tomorrow, the local calendar will see the Tertiary Industry Index and Tokyo Condominiums for Sale data alongside 1-year note supply.

• Gold opened Monday strongly initially touching $2,994.20 before lower at $2,987.25
• The Belgian government is considering the sale of a portion of its gold reserves (valued at €20bn) to bolster its defense budget, according to L’Echo newspaper.
• Ramelius Resources Ltd. will acquire Spartan Resources Ltd. in a deal valuing the latter at A$2.4 billion with the combined entity expected to become a leading Australian gold producer, with output exceeding 500,000 ounces a year by 2030.
• The relentless demand for gold ETF’s in India continued in February with net inflows of US$260m.  Whilst down from January it still represented the second highest total since records began.
• Gold finished Friday at US$2,984.16 up +2.5% for the week.
• Having reached a new high, trading through $3,000 briefly, gold’s retreat looks driven by profit taking rather than a change in its fortunes.  .
• Many strategists have revisited their gold forecasts for 2025 with some suggesting $3,500 as their target.

ACGBs (YM flat & XM +1.0) are little changed.

• Today, the local calendar has been empty. The next event on the local calendar is Sarah Hunter's, Assistant Governor (Economic) speech at the AFR Banking Summit tomorrow.  
• However, the highlight of the week is likely to be Thursday’s jobs data for February. Jobs have consistently printed stronger than expected with January up 44k. Bloomberg consensus is forecasting a 30k rise in new jobs with the unemployment rate stable at 4.1% and the participation rate at 67.3%. It will also be important to monitor the underemployment, youth unemployment and hours worked. The RBA said that the strong labour market would have been the key reason to leave policy on hold in February.
• Cash US tsys are flat to 1bp richer in today’s Asia-Pac session after Friday’s modest sell-off.
• Cash ACGBs are 1bp richer, with the AU-US 10-year yield differential at +10bps.
• Swap rates are flat.
• The bills strip is modestly weaker, with pricing -1 to -2.
• RBA-dated OIS pricing is flat to 4bps firmer across meetings today. A 25bp rate cut in April is given a 7% probability, with a cumulative 65bps of easing priced by year-end (based on an effective cash rate of 4.09%).