BOJ: Fixed Rate Operation Offer
The BoJ offers to buy an unlimited amount of 10-Year JGBs at a fixed rate of 0.25%.
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BOJ: Fixed Rate Operation Offer
The BoJ offers to buy an unlimited amount of 10-Year JGBs at a fixed rate of 0.25%.
AUSSIE BONDS: Regaining Some Poise
The wider ACGB curve has bull flattened in early trade this week, with Aussie bond futures recovering some poise after their early downtick, akin to U.S. Tsy futures, although tier 1 news flow has been virtually non-existent since the re-open of markets. As a result, YM last deals +3.0, while XM is +6.0 (both contracts have failed to challenge their respective post-Sydney settlement peaks registered ahead of the weekend). The richening beyond 10s is fairly consistent when it comes to cash ACGB trade, with 12+-Year benchmarks ~6.5bp richer on the day. EFPs have tightened, with the move in 3s outstripping that in 10s, leading to some steepening of the box. Bills run 2-7bp richer through the reds, aided by the aforementioned recovery in bonds.
CNH: USD/CNH Steady, LPRs Seen Unchanged
USD/CNH remains range bound, continuing to draw selling interest above 6.7200, while dips sub-67000 can't be sustained. We track close to 6.7100 at the start of this week.
- The main focus today, will be the upcoming 1yr and 5yr loan prime rate fixings. The market expects no change in terms of bank rates, currently at 3.70% for the 1yr and 4.45% for the 5yr. Only a small number of surveyed economists expect a cut.
- Recall last week the 1 yr MLF rate was kept steady by the PBoC at 2.85%.
- Onshore media reports continue to focus on measures to boost the growth outlook. Shanghai Securities News reports China is planning to take 'extraordinary' measures to address waning investment momentum (see this link for more details).
- This morning we have seen a sharp drop in Singapore iron ore futures, dipping as far as $114/tonne. This is on top of last week's 14% dip. Rising inventory levels onshore and weaker demand conditions appear to be the main drivers.
- President Biden stated that he and President Xi will speak soon, without specifying a date. He also stated that he is weighing a decision on how to proceed with tariffs on China goods.
