JGBS: Futures Nudge Higher, Calendar Light
JGB futures more than reverse the overnight downtick to be firmer in early Tokyo trade, +7 versus settlement levels. A thin domestic data calendar and a lack of supply-side drivers (JGB auctions and BoJ bond purchase operations) likely leave participants on headline watch ahead of US CPI later today.
- Cash JGBs are richer across the curve, except in the 1-year zone which is 0.9bp cheaper. Yields are 0.2-1.4bp lower with the cash curve flatter. The benchmark 10-year yield is 0.8bp lower at 0.418%, below the BoJ's YCC limit of 0.50%.
- The swaps curve bull flattens with swap spreads tighter out to the 10-year zone and wider beyond.
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US TSYS: Richer Start
Cash tsys have opened dealing 1-4bps richer across the major benchmarks, the curve has bull steepened. Asia-Pac participants have faded Friday's post-NFP cheapening, perhaps focusing on the lower than expected average hourly earnings. The latest Sino-Taiwan tensions, as China simulated precision strikes on Taiwan during military drills over the weekend, may be adding a layer of support. TYM3 deals at 115-26+, 0-01, with a narrow 0-04+ range observed thus far.
- A thin data calendar leaves local participants on headline watch in today's Asian session.
CNH: Marginally Firmer In Early Trade, CPI & PPI Tomorrow Headline Week's Data
USD/CNH deals at 6.87/88, ~0.1% softer in early trade on Monday.
- The pair finished ~0.1% softer on Friday, gains were briefly pared in the wake of the NFP print however CNH rallied in late trade to finish the day firmer.
- Technically we continue to consolidate, dealing in narrow ranges. On the downside 2023 lows at 6.6975 remains the target for bears. Bulls look to retest the 7 handle.
- March Official CPI and PPI data due tomorrow headlines the week's data print. We also have March Export data due on Thursday.
JPY: Yen Marginally Firmer In Early Trade, Trade Balance On Tap
USD/JPY prints at ¥131.90/132.00, the pair is ~0.2% softer in early dealing as the Yen begins Monday's trade on the front foot.
- The pair firmed in the aftermath of Friday's NFP print. The unemployment rate ticked lower as Payrolls were marginally firmer than consensus and the participation rate ticked higher. Average Hourly Earnings were a touch softer than expected.
- Technically the trend direction remains down. Support comes in at ¥130.64, low from Apr 5, a break through here opens ¥129.64 the bear trigger. Resistance is seen at the 20-Day EMA (¥132.55).
- Feb Trade Balance is on tap today, a deficit of ¥517.8bn is expected. March Consumer Confidence Index is also on the wires.
