US TSYS: Asia Wrap - Quiet Session
Apr-30 03:30
TYM5 has traded a little higher with a range of 112-04 to 112-09 during the Asia-Pacific session. It last changed hands at 112-06, up 0-01 from the previous close.
- The US 10-year yield is a little lower, dealing around 4.16%, down from its close around 4.1716%.
- The US 2-year yield is unchanged, dealing around 3.65%.
- US President Trump has spoken at a rally in Michigan, which marks his first 100 days in office. The speech was big on rhetoric, but policy related areas of interest for the market remained light.
- “The trade deficit widened to a record in March, and consumer spending slowed, contributing to the GDP growth slowdown.”(per BBG)
- MNI Economist re GDP - “Domestic demand should look somewhat more robust but will be clouded by question marks over the extent to which areas of strength were driven by tariff front-running”.
- Month End flow will continue to be a key driver tonight.
- The 10-year Yield, has put in a lower high around 4.40% and has broken through the recent support around 4.25%. The next support is towards the 4.10 area which should find supply once more.
- Data/Events : ADP private jobs data, GDP, Chicago PMI, PCE and Home Sales.
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JGBS AUCTION: 2Y Supply Faces A Yield Near Highest Since ‘08 But Steeper Curves
Mar-31 03:16
The Japanese Ministry of Finance (MoF) will today sell Y2.6tn of 2-Year JGBs. The MoF last sold 2-year debt on 27 February 2025.
- Currently, the 2-year yield stands slightly higher than last month’s outing, hovering just below the highest level since 2008 set last week.
- The 2/5 and 2/10 yield curves are 5-10bps steeper compared to the previous month's auction.
- Given these dynamics, it remains uncertain whether today’s elevated 2-year yield will be sufficient to attract strong demand in the auction.
- Results are due at 0335 GMT / 1235 JST.
JGBS AUCTION: PREVIEW - 2-Year JGB Auction Due
Mar-31 03:13
The Japanese Ministry of Finance (MoF) will today sell Y2.6tn of 2-Year JGBs. The MoF last sold 2-year debt on 27 February 2025, the auction drew cover of 3.1637x at an average yield of 0.826%, an average price of 99.948, a high yield of 0.833%, a low price of 99.935, with 62.4996% of bids allotted at the high yield.
- Last month’s 2-year auction saw a significant tapering in demand, with the cover ratio falling to 3.1637x from 4.06x and the auction tail lengthening compared to the previous month.
- Aligning with that result, this month’s 5-year auction showed weak demand metrics, with the auction price failing to meet expectations, the cover ratio declining to 3.1658x from 3.8158x and the auction tail lengthened to 0.07 from 0.03.
- Results are due at 0335 GMT / 1235 JST.
CHINA: Liquidity Injection Gives Bonds A Boost as Futures Rise.
Mar-31 02:59
- As the PBOC injected liquidity in this morning’s OMO, bond futures jumped.
- China’s 10YR is up +.125 today at 108.010.
- The 10YR has broken through the 100-day EMA of 107.92 with the next key level the 50-day EMA at 108.06.
- China’s 2YR bond future is going in the other direction, down -0.02 at 102.42.
- Having traded above the 20-day EMA at 102.44 briefly, the 2YR now sits below that trend line.
- Having finished last week lower in yields, the CGB10YR is better bid this morning, -0.5bps lower in yield
