CHINA: Bond Wrap.
Oct-17 05:14
- China to double Loans for Unfinished Properties to $562 Billion (source: BBG).
- A release from the China Reat Estate Information Corp (CRIC) reporting that land buyers spent CNY73bn in September, a 92% month on month increase and that Golden Week saw China’s largest state-owned developers experience a significant pick up in contracted sales (source CRIC).
- Equity markets gave a muted response to the press conference from the Housing Minister with all major indices barely positive.
2yr 1.433% 5yr 1.798% 10yr 2.12% (-1bp) 30yr 2.328%
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JGBS: Cash Bond Yields Mostly Lower, US Retail Sales Later Today
Sep-17 05:02
JGB futures are stronger, currently mid-range, trading at +16 compared to settlement levels following yesterday’s public holiday.
- (MNI) The BoJ board will consider leaving its policy interest unchanged at 0.25% when it hands down its decision on Friday, despite the belief among policymakers that the economy and prices are largely moving in line with projections.
- The upside risk to prices driven by high import costs – a key concern for policymakers in July – has fallen due to the yen's appreciation, allowing the Bank more time to watch price moves without the need to raise the policy rate for now.
- Cash US tsys are flat to 1bp cheaper in today’s Asia-Pac session. Today's US calendar sees Retail Sales, Industrial Production and a 20y bond auction.
- The cash JGB curve continues to hold a twist-flattening, pivoting at the 2-year, with yields 1.8bps higher to 3.1bps lower.
- Swap rates are flat to 1bp lower out to 30-year and 2bps higher beyond.
- The local data calendar has been light today, with the July tertiary industry index due later.
- Tomorrow, the local calendar will see Trade Balance and Core Machine Orders data alongside 1-year supply and BoJ Rinban Operations covering 1-25-year JGBs.
US TSYS: Tsys Futures Steady Ahead Of Retail Sales
Sep-17 04:54
- It has been a very subdued trading session across all markets today, with China, Taiwan & South Korea out for public holidays. Later today we have US Retail Sales, BBG consensus has retail sales dropping 0.2% m/m in August, following a 1% rise in July.
- Tsys futures are little changed today TUZ4 is -00⅜ at 104-14⅛, while TYZ4 is -01 at 115-17
- Earlier, there was a Block 2s10s steepener, and an block sell of FV.
- Cash tsys yields are flat to 1bps higher, the curve has steepened slightly. The 2yr is +0.2bps at 3.553%, while the 10yr is +0.4bps at 3.621%.
- Projected rate cuts have firmed 2-3bps throughout the session with the moves coming just post NY close and have continued throughout the Asian session vs. Monday levels (*) : Sep'24 cumulative -43.3bp (-40.6bp), Nov'24 cumulative -80.5bp (-79.1bp), Dec'24 -121.0bp (-120.0bp).
- Today we have Retail Sales, Industrial Production and a 20y bond auction
BOBL TECHS: (Z4) Trend Needle Points North
Sep-17 04:53
- RES 4: 120.905 1.50 retracement proj of the Aug 5 - Sep 3 bear leg
- RES 3: 120.722 1.382 retracement proj of the Aug 5 - Sep 3 bear leg
- RES 2: 120.496 1.236 retracement proj of the Aug 5 - Sep 3 bear leg
- RES 1: 120.230 High Sep 11 and the bull trigger
- PRICE: 119.880 @ 05:33 BST Sep 17
- SUP 1: 119.620 Low Sep 12
- SUP 2: 119.439 20-day EMA
- SUP 3: 119.030 Low Sep 4
- SUP 4: 118.580 Low Sep 3 and key support
A bullish condition in Bobl futures remains intact and recent gains have reinforced this theme. The move higher on Sep 11 resulted in a print above key resistance and the bull trigger at 120.130, the Aug 5 high. A clear break of this level would confirm a resumption of the medium-term uptrend. Sights are on 120.496, a Fibonacci retracement point. On the downside, initial firm support to watch is 119.439, the 20-day EMA.
