JGBS: Mostly Cheaper Led By 10Y, BoJ Gov Ueda Reiterates Rhetoric
Feb-12 01:33
In Tokyo morning trade, JGB futures are weaker, -9 compared to settlement levels.
- BoJ Governor Ueda reiterated that the central bank will implement appropriate policy to achieve its price target, aligning with recent rhetoric. His remarks were made in response to a question in Parliament.
- M2 & M3 stock rose 1.3% y/y and 0.8% y/y respectively in January.
- “The 1.5% Japan government bond set to mature in March 2034 is cheapest against its peers, according to a Bloomberg analysis that interpolates against a curve.”
- Cash US tsys are flat to 1bp richer in today’s Asia-Pac session after yesterday’s modest sell-off.
- Cash JGBs are 1bp richer to 1bp cheaper across benchmarks, with the 10-year underperforming. The benchmark 10-year yield is 1.5bps higher at 1.332% after making a fresh cycle high of 1.337% today.
- There is 10-year linker supply due today.
- The swaps cure has twist-steepened, with rates 1bp lower to 1bp higher. Swap spreads are tighter.
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CNH: USD/CNY Fixing Steady, PBoC Vows Stable Yuan/Tweaks Capital Rule
Jan-13 01:25
The USD/CNY fixing printed at 7.1885, versus 7.3450 as per the Bloomberg market consensus.
- This puts the error term for the fixing at -1565pips, fresh wides since April 2024.
- USD/CNH is lower, last near 7.3550, around 0.10% stronger in CNH terms.
- headlines have filtered out from a FX meeting held in Beijing. The PBoC stating that the yuan will stay at a reasonable, balanced level. (per BBG). The central bank also raised the cross border macro adjustment parameter from 1.50 to 1.75, effective today.
- This is designed to boost offshore borrowing by local companies.
AUSSIE BONDS: Heavy & At Session Cheaps After Today’s Local Data Dump
Jan-13 01:23
ACGBs (YM -15.0 & XM -8.0) have extended morning weakness to be sharply cheaper and at the Sydney session's worst levels.
- The Melbourne Institute Inflation Index rose 0.6% m/m in December versus +0.2% in November. The index rose 2.6% y/y versus +2.9% in November.
- ANZ-Indeed job advertisements rose 0.3% from a month earlier (-12.5% y/y) in December.
- There have been no cash dealings in US tsys in today’s Asia-Pac session with Japan out for a holiday. TYH5 is, however, slightly weaker at 107-11, -0-01+ from NY closing levels.
- Cash ACGBs are 8-14bps cheaper, led by the short end.
- Swap rates are 7-12bps higher, with the 3s10s curve flatter.
- The bills strip has bear-steepened, with pricing -3 to -13.
- RBA-dated OIS pricing is 2-14bps firmer across meetings today. A 25bp rate cut is still more than fully priced for April (105%), with the probability of a February cut at 69% (based on an effective cash rate of 4.34%).
- AOFM Bond issuance will resume this week, with A$800mn of the 3.50% 21 December 2034 bond to be sold on Wednesday and A$700mn of the 2.75% 21 November 2027 bond to be sold on Friday.
US TSY OPTIONS: Option Flow: SFR Fly Sold
Jan-13 01:08
- BSFRM6M8 (SFR June26/June27/June28) Fly sold at .03 x6000. Post time 11:26.53 AEST
