TYZ3 deals at 108-28+, -0-00+, a 0-07 range has been observed on volume of ~120k.
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This morning’s BoJ Rinban operations saw less negative to positive spreads and generally higher cover ratios (1-3-year: 2.69x, 3-5-year: 2.40x, 5-10-year: 1.70x and 25-year+: 2.73x). On balance, this may generate some slight pressure in early rounds of the Tokyo afternoon session.
NZGBs closed 1-4bps richer after dealing in narrow ranges during the local session. The previously outlined Performance Services Index failed to be a market mover.
Q3 CPI prints on Tuesday and is expected to show a jump in quarterly inflation with both tradeables and non-tradeables expected to post larger rises than in Q2, implying that the increase is not just an oil story. Q3 is expected to be boosted by higher accommodation and insurance prices plus increased government charges including public transport. The RBNZ is likely to look through the data if it’s in line with expectations as it forecast a strong Q3 outcome of 2.1% q/q and 6% y/y in August, higher than the Bloomberg consensus. Also at its October meeting it said it was focused on the medium term.