THAILAND: Further BoT Cuts Possible, Market Has Close To One Further Cut Priced

At the Tokyo lunch break, JGB futures are weaker, -9 compared to settlement levels.

• "Japanese Prime Minister Sanae Takaichi is set to meet with Bank of Japan Governor Kazuo Ueda on Tuesday as she mulls support for an economy that shrank over the summer. The two will meet at 3:30 p.m. in Tokyo, according to the prime minister's office. The meeting comes after a report showed the Japanese economy contracted in the three months through September on a US tariff-linked slump in exports and a sharp drop in property buying." - BBG
• Cash US tsys are 1-2bps richer, with a steepening bias, in today's Asia-Pac session.
• Cash JGBs are 1bp richer to 5bps cheaper across benchmarks, with a steeper curve. The benchmark 20-year yield is 3.4bps higher at 2.785%, a fresh cycle high, ahead of tomorrow's supply. (see chart)
• The 20-year JGB is at a similar valuation to last month in terms of the 10/20/30 butterfly.
• Swaps have twist-steepened, with rates 1bp lower to 5bps higher.

Source: Bloomberg Finance LP

Bitcoin continues to trade very heavy in the Asian session, breaking the overnight lows and now having a look toward the pivotal $90k area. If this break is sustained it could signal an even deeper pullback toward the $65k-$75k area. {XBTUSD Curncy}

Fig 1: Bitcoin spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

ACGBs (YM +2.5 & XM +2.0) are modestly richer after the release of RBA Minutes.

• Cash US tsys are 1-2bps richer, with a steepening bias, in today’s Asia-Pac session as risk-assets fall.
• Cash ACGBs are 2-3bps richer with the AU-US 10-year yield differential at +32bps.
• The November meeting minutes reiterated that the RBA’s central scenario is “in balance” with risks to both the downside and upside. How these risks will develop is likely to determine whether monetary policy stays on hold or rates are cut further and while it is “not yet possible to be confident” about which scenario will materialise, the Board will “remain cautious and data dependent”. With core inflation above target and ongoing signs of a recovery in demand, policy is likely to be on hold in December and into early 2026, depending on the data.
• RBA-dated OIS pricing is slightly softer today, showing a 25bp rate cut in December at a 2% probability, with a cumulative 12bps of easing priced by mid-2026.
• The bills strip has bull-flattened, with pricing +1 to +3.

Source: Bloomberg Finance LP / MNI