CHINA: Benchmark Lending Rates Unchanged Again.
Mar-20 01:41
- Banks in China kept their benchmark loan prime rates unchanged at 3.1% for 1-year and 3.6% for 5-year.
- The 1-year loan prime rate is the most frequently used for corporate or personal loans whereas the 5-year is the most frequently used for mortgages.
- China’s Premier Li Qiang indicated that ‘timely’ interest rate cuts and long term liquidity provisions into the banking system are a priority.
- It was widely expected that no change would occur, especially when overnight the Federal Reserve held their key interest rate steady.
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JGBS AUCTION: 20-Year Supply Faces A Cyclical High Yield But A Flatter Curve
Feb-18 01:36
The Japanese Ministry of Finance (MoF) will today sell Y1.0tn of 20-Year JGBs.
- Today’s 20-year JGB auction offers an outright yield at a cycle high, approximately 5bps above last month’s level.
- However, the 10/20 yield curve has flattened over the past month, reaching its lowest point since mid-2023. Additionally, the 20-year JGB is now at its most expensive valuation within the 10/20/30 butterfly since late 2022.
- On the other hand, the auction comes amid improving sentiment toward long-term global bonds.
- Given these dynamics, it remains to be seen whether today’s supply can sustain positive momentum for JGB auctions or if market caution will weigh on demand.
- Results are due at 0335 GMT / 1235 JT.
JGBS AUCTION: PREVIEW - 20-Year JGB Auction Due
Feb-18 01:33
The Japanese Ministry of Finance (MoF) will today sell Y1.0tn of 20-Year JGBs. The MoF last sold 20-year debt on 16 January 2025, the auction drew cover of 3.7891x at an average yield of 1.983%, an average price of 100.24, a high yield of 1.985%, a low price of 100.20, with 60.5416% of bids allotted at the high yield.
- The latest 20-year JGB auction follows robust results from last month’s issuance. The low price significantly outperformed dealer forecasts, the cover ratio rose to 3.7891x from 3.379x in the previous auction, while the auction tail shortened.
- Today’s auction comes on the heels of robust demand metrics observed in this month’s 30-year JGB auctions, suggesting investor appetite remains firm for longer maturities.
- Results are due at 0335 GMT / 1235 JT.
US TSYS: Tsys Futures Edge Lower, 10yr Back To 4.50%
Feb-18 01:32
- Tsys futures are testing Monday's lows, TY is -05 at 109-05, a continuation lower would open 108-00, the Jan 16 low, and expose 107-06, the Jan 13 low and bear trigger. Key resistance and the bull trigger is 110-00, Feb 7 high.
- Cash tsys curves are steepening, with the 2s10s +2bps at 23.435. The 2yr is little changed at 4.261%, while the 10yr is back to 4.50%, up 2.3bps.
- Tsys yields are trading 3-3.5bps lower across the curve with the 10yr leading over the past week.
