JPY: Asia Wrap - USD/JPY Demand Seen Sub 145.00
May-19 04:25
The Asia-Pac range has been 144.81 - 145.47, Asia is currently trading around 145.30. USD/JPY opened lower and traded heavily for most of our session on the back of a knee-jerk reaction lower in stocks to the downgrade news.
- MNI - China Data: “The April activity outcomes were mixed, with retail weaker than forecast, while IP posted a modest upside surprise. Both measures slowed versus March outcomes. Headwinds still persist in the property sector, while house price growth slipped further into negative territory.”
- "*ISHIBA: CAN'T ACCEPT US TARIFFS INCLUDING FOR CARS" - BBG
- JAPAN FINMIN KATO: JAPAN NOT FACING PROBLEM PROCURING FUNDS FROM MARKET VIA DEBT ISSUANCE, IF JAPAN LOSES MARKET TRUST IN ITS FINANCES, IT MAY FACE RISE IN INTEREST RATES THAT COULD AFFECT DEBT REDEMPTION" RTRS
- USD/JPY tested below 145.00 this morning as stocks turned down, some demand seen below 145.00 after the Japanese fix.
- The support around 144/145 looks important now and a break would once again bring the focus back to the pivotal 140.00 area. The price action though does not look great and the market is still more comfortable selling rallies..
Options : Closest significant option expiries for NY cut, based on DTCC data: Y141.90($1.07bln), Y147.00($969.6m), Y146.50($780.7m), Upcoming Strikes : 145.50($1.03b May 20), 145.00($789.7m May 20), 142.00($878m May21)
Fig 1 : USD/JPY Spot Daily Chart
Source: MNI - Market News/Bloomberg
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LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)
Apr-18 05:18
| Date | Time | Country | Event |
| 25-Apr | 0745 | FR | Manufacturing Sentiment |
| 29-Apr | 0700 | DE | GFK Consumer Climate |
| 29-Apr | 0800 | ES | HICP (p) / GDP |
| 29-Apr | 0900 | EU | M3 / Consumer Expectations Survey |
| 29-Apr | 0900 | IT | ISTAT Confidence Indices |
| 29-Apr | 1000 | EU | Consumer Confidence, Industrial Sentiment |
| 30-Apr | 0630 | FR | GDP (p) / Consumer Spending |
| 30-Apr | 0700 | DE | Import/Export Prices / Retail Sales |
| 30-Apr | 0745 | FR | HICP (p) / PPI |
| 30-Apr | 0855 | DE | Unemployment |
| 30-Apr | 0900 | DE | GDP (p) / State level CPI |
| 30-Apr | 0900 | IT | GDP (p) |
| 30-Apr | 1000 | EU | GDP preliminary flash est. |
| 30-Apr | 1000 | IT | HICP (p) |
| 30-Apr | 1100 | IT | PPI |
| 30-Apr | 1300 | DE | HICP (p) |
JGBS: Twist-Steepener Holds Going Into W/E, BoJ Gov Ueda Reiterates Caution
Apr-18 05:16
JGB futures are stronger, +18 compared to settlement levels, sitting near the middle of the range after a choppy session.
- “Governor Kazuo Ueda reiterates his stance that the central bank will carefully monitor if its economic outlook will be realized, accounting for the effects of US tariff measures, without preconception. The BoJ will raise the benchmark rate if the outlook is realized, Ueda says in response to questions in parliament.” (per BBG)
- “Fukoku Mutual Life Insurance Co. plans to invest in Japan's super-long government bonds this fiscal year after their yields skyrocketed. The company aims to increase domestic government bond holdings by ¥30 billion, with gross purchases potentially reaching ¥300-400 billion.” (per BBG)
- Earlier today, Headline CPI for March showed +3.6% y/y versus +3.7% estimate. Core and Core-Core printed +3.2% y/y and +2.9% y/y, respectively, versus estimates of +3.2% and +2.9% and priors +3.0% and +2.6%.
- Cash US tsys are closed today for the Good Friday holiday.
- Cash JGBs have twist-steepened, pivoting at the 20-year, with yields 2bps lower to 5bps higher.
- Swap rates are 2bps lower to 2bps higher, with a steepening bias.
- On Monday, the local calendar will see Tokyo Condominiums for Sale data.
CHINA: Bond Futures Marginally Up Despite Liquidity Injection.
Apr-18 04:02
- China’s bond market reacted very little to a second day of sizeable liquidity injection.
- China’s 10YR bond future is up just +0.03 at 109.04 and remains firmly above all major moving averages. The nearest being the 20-day EMA at 108.61.
- The 2YR bond future is down -0.02 at 102.46; remaining below all major moving averages – the nearest being the 20 day EMA at 102.52.
- The 10YR CGB is marginally lower in yield at 1.64%
