BOJ: On Hold, But 2 Dissents, BoJ Outlines Plans To Sell ETF/J-REIT Holdings

The TYU5 range has been 111-21 to 111-26 during the Asia-Pacific session. It last changed hands at 111-23+, down 0-01 from the previous close. 

• The US 2-year yield has edged higher trading around 3.752%, up 0.01 from its close.
• The US 10-year yield has edged higher trading around 4.308%.
• Yields are still firmly within its wider 4.10%-4.65% range. The 4.35% pivot area in 10-Year yields found solid demand overnight helped by the S&P rating, the market will now be waiting for any clues from Powell's upcoming Jackson Hole speech.
• “TRUMP: EVERY SIGN IS POINTING TO A MAJOR RATE CUT" - BBG
• "Could somebody please inform Jerome “Too Late” Powell that he is hurting the Housing Industry, very badly? People can’t get a mortgage because of him. There is no Inflation, and every sign is pointing to a major Rate Cut. “Too Late” is a disaster!" - (Trump Truth Social Post)
• (Bloomberg) - It’s not the first time that when monetary policy is tweaked in New Zealand, there’s a read across for G-10 peers, especially Treasuries. The RBNZ lowered interest rates as expected, but surprised traders by implying deeper cuts into next year. The resulting yield curve steepening is likely to be replicated by fixed income peers where central banks have an easing bias.
• Data/Events:  MBA Mortgage Applications, FOMC Meeting Minutes

Fig 1: 10-Year US Yield 2H Chart

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

• China's bond futures are up in this morning's trade after a fourth straight day of liquidity injection during the OMO.
• The 10-year is up +0.05 at 107.985, but remains well below all major moving averages.  The nearest above is the 20-day EMA at 108.30.
• The 2-year bond future is up +0.01 to 102.34 nearing the 20-day EMA of 102.35.

• This morning's OMO injected CNY497bn of liquidity via 7-day reverse repo taking the four day tally of injections to CNY1.2bn.  
• Bonds yields are edging lower with the CGB10yr at 1.76% (from yesterday's close of 1.77%)

Some of the key Asian equity benchmarks are down sharply today, particularly those with a tech focus. This follows sharp US losses in this space during cash Tuesday trade. Tuesday saw some profit-taking after stalling around 6500 for the main US benchmark, as the market awaits Powell's Jackson Hole speech. Big Tech was hardest hit, having the largest concentration of positioning. We have also seen follow on US equity futures weakness, led by the tech side so far today. Nasdaq futures were last down a little over 0.50%, while Eminis were off close to 0.30%. 

• There are some outperformers within Asia Pac so far today, with New Zealand up over 1.6% after the dovish RBNZ 25bps rate cut. The NZX 50 was last around Jan highs.
• Conversely, Taiwan's Taiex is down around 2.5%, while the Kospi is off close to 2%, as these markets feel the brunt of tech related sell-off. Offshore investors have turned net sellers of these markets in recent sessions as well.
• The NKY225 is down by around 1.8% in Japan, while the Topix is down by 0.75%.
• China's CSI 300 is down a modest 0.1%, while the HSI is down by nearly 0.6% at the lunch time break. The HSI tech sub index is off by 1.26% though.
• In South East Asia, Indonesia is outperforming modestly, up +0.55%, while most other markets are down a touch.