JGBS: Little Changed After PPI Services & Gov Ueda Comments

Mar-26 01:33

In Tokyo morning trade, JGB futures are slightly weaker, -5 compared to settlement levels, after giving up an overnight uptick.

  • The Feb Japan PPI services rose 3.0%y/y, against a 3.1% market forecast and 3.2% prior print from Jan (which was initially reported as a 3.1% rise). In m/m terms the services PPI was flat, while BBG notes the 3 month annualized paced slowed to 1.0% in Feb. This metric was at 4.8% in Dec last year.
  • “Overseas trade policies and the impact on global price trends are among factors that have added to uncertainties for Japan’s economy, BoJ Governor Ueda says. The long-held belief that prices and wages won’t rise is starting to fade, Ueda says in a semi-annual report to parliament. Sees both upside and downside risks for prices, with the underlying price trend still below the bank’s 2% target.” (per BBG)
  • Cash US tsys are ~2bps cheaper in today's Asia-Pac session after yesterday's modest gains. Wednesday's focus is on Durables/Cap Goods, Tsy 5Y Sale and Fed Speak from MN Fed Kashkari Fed and StL Fed Musalem.
  • Cash JGBs are little changed across benchmarks. The benchmark 10-year yield is unchanged at 1.583% after reaching a fresh cycle high of 1.587%.
  • Swap rates are little changed.

Historical bullets

CHINA: Central Bank Injects Liquidity via OMO. 

Feb-24 01:30
  • The PBOC issued CNY292.5bn of 7-day reverse repo at 1.5% during this morning’s operations
  • Maturities today CNY190.5bn
  • Net liquidity injection CNY102bn.
  • The PBOC monitors and maintains liquidity in the interbank system through the issuance of reverse repo.
  • The CFETS Pledged Repo Deposit Institutions 7 Day Weighted Average is at 1.7154% down from Friday at 2.2156%.
  • The China Overnight Interbank Repo Rate is at 1.83% (from Friday at 1.54%).
  • The China 7-day Interbank Repo Rate is at 2.20% (from Friday at 1.75%)
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MNI: CHINA PBOC CONDUCTS CNY292.5 BLN VIA 7-DAY REVERSE REPO MON

Feb-24 01:22
  • CHINA PBOC CONDUCTS CNY292.5 BLN VIA 7-DAY REVERSE REPO MON

CNH: USD/CNY Fixing Edges Back Up, But Remains Within Recent Ranges

Feb-24 01:19

The USD/CNY fix printed at 7.1717, against a BBG market consensus of 7.2535.

  • The fixing edges back up but remains within recent ranges. The fixing error was slightly wider at -815pips.
  • USD/CNH has edged down today, last under 7.2500, as broader USD sentiment softens, led by the EUR (which is back above 1.0500).