CHINA: Country Wrap – Bond Yields Lower Again.
Dec-27 04:53
- China bond yields headed lower again with the 10YR at 1.7% whilst equity markets rallied.
- This despite industrial profits continuing to decline down -7.3%
- CNY: Yuan Reference Rate at 7.1893 Per USD; Estimate 7.2990
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MNI EXCLUSIVE: China Real-Estate Advisor On Property Outlook
Nov-27 04:50
China real-estate advisors share their property market outlook. On MNI Policy MainWire now, for more details please contact sales@marketnews.com.
JGBS: Bear-Steepener As Poor 40Y Auction Weighs
Nov-27 04:45
JGB futures are weaker and not far from lows, -14 compared to settlement levels, on a data-light Tokyo session.
- The issuance of 40-year bonds today encountered a poor reception, with the actual high yield overshooting dealer expectations. As per the BBG poll, the anticipated yield was projected at 2.54% versus the realised yield of 2.55%.
- Additionally, the cover ratio was lower at 2.2364x versus 2.5798x at the prior outing.
- As noted in the auction preview, today’s yield was approximately 30bps higher than the prior auction, with the 20/40-year yield curve slightly steeper and near its steepest level in the past 12 months.
- Given these factors, the auction outcome was viewed as disappointing.
- Cash US tsys are flat to 1bp richer, with a steepening bias in today’s Asia-Pac session.
- Cash JGBs are flat to 2bps cheaper across benchmarks beyond the 1-year, with the 40-year leading. The benchmark 40-year yield is 2.1bps higher at 2.64%.
- Swap rates are 1bp lower to 2bps higher, with the belly outperforming.
- Tomorrow, the local calendar will see Weekly International Investment Flow data alongside BOJ Rinban operations covering 3-25-year and Inflation-Indexed JGBs.
AUSSIE BONDS: Cheaper After CPI Monthly But Muted Reaction
Nov-27 04:41
ACGBs (YM +1.0& XM +2.0) are slightly stronger but slightly cheaper after October’s CPI data. There was an initial spike richer, but that was quickly unwound.
- October CPI printed at 2.1%, lower than expected but in line with September. However, the trimmed mean increased to 3.5% from 3.2%, the highest since July. The first month of the quarter has limited updates for services components.
- The RBA is currently focusing on underlying and services measures due to the temporary decline in headline inflation from government electricity rebates. It also prefers the quarterly CPI data with Q4 out on January 29.
- Cash US tsys are ~1bp richer in today’s Asia-Pac session.
- Cash ACGBs are 1-2bp richer with the AU-US 10-year yield differential at +13bps.
- Swap rates are flat to 2bps lower.
- Bills strip pricing is flat to +2, with a flattening bias.
- RBA-dated OIS pricing is flat to 3bps softer across meetings, with the mid-2025 leading the move.
- A 25bp rate cut is not fully priced until July. It was May before the data.
- Tomorrow, the local calendar will see Q3 Private Capital Expenditure data and a speech by RBA Governor Bullock at the CEDA Conference aftermarket.
