JGBS: Richer At Lunch But Off Best Levels, Middle East In Focus After Airstrikes
Jun-13 02:55
At the Tokyo lunch break, JGB futures (JBU5) are sharply higher at 139.39, +56 compared to the settlement levels, but well off session bests (138.80).
- Focus remains well and truly on developments in the Middle East after today’s Israeli airstrike on Iran.
- Netanyahu said that this was a decisive moment in Israel's history, and added that the military operation will continue for as many days as it takes to remove the threat. It is targeting Iran's nuclear infrastructure, ballistic missile factories and military capabilities (per RTRS/BBG).
- It is also targeting Iran's main enrichment facility in Natanz, along with nuclear scientists working on the nuclear bomb program, Netanyahu added.
- Also, reports that Iran's IRGC commander Hossein Salami has been killed are another focus point. Military Blog TWZ notes: "Iran's Tasnim News Agency announces the assassination of Revolutionary Guard commander Hossein Salami. This is a major deal. It will spark extreme outrage and calls for revenge, especially among the extremist elements in Iran and the IRGC's orbit and it is a major victory for Israel."
- Cash US tsys are ~3bps richer, but off session bests, in today's Asia-Pac session.
- Cash JGBs are flat to 5bps richer across benchmarks, with the futures-linked 7-year leading.
- Swap rates are 1-2bps lower.
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MNI EXCLUSIVE: Insight On German FDI Into CHina
May-14 02:52
A leading German industry leader in China provides insight into German FDI. On MNI Policy MainWire now, for more details please contact sales@marketnews.com.
AUSTRALIA DATA: Wage Gains Pick Up, Led By Public Sector
May-14 02:19
The Q1 wages print was slightly above market expectations, printing at 0.9%q/q (0.8% was forecast and the prior was 0.7%). In y/y terms we rose 3.4%, also above forecasts (3.2%, which was also the prior outcome).
- This is the first y/y momentum gain since Q2 last year. We are below recent highs for the metric (4.3%y/y, recorded in Q4 2023), but still comfortably above long averages (the 3yr moving average for y/y wages growth is back at 2.5%), see the chart below.
- At face value this suggests little need for aggressive RBA easing action and still suggests tightness in the labor market.
- The detail was a touch on the dovish side, in the sense that stronger wage gains were more focused in traditional public service areas. The ABS noted: "Seasonally adjusted private sector annual wage growth was unchanged from the December quarter at 3.3 per cent. Annual public sector wage growth was higher than the private sector at 3.6 per cent in the March quarter 2025, up from 2.9 per cent in the December quarter 2024."
- The strongest q/q gains were for health care, +1.4%, education +1.3% and public administration, +1.0%. Utilities, along with wholesale trade, at 0.9%, were the next strongest. Weakness was evident in retail trade, accommodation (+0.1%) and manufacturing (+0.3%), although these figures are not seasonally adjusted.
Fig 1: Australian Wages Growth Ticks Up In Q1, Led By Public Sector Gains
Source: MNI - Market News/Bloomberg
AUSSIE BONDS: Cheaper, WPI Beats But Limited Reaction
May-14 02:11
ACGBs (YM -6.0- & XM -6.5) are cheaper after Q1 Wage Price Index (WPI) surprises on the upside.
- The Q1 WPI, which measures hourly rates of pay, rose 3.4% seasonally adjusted from the previous year, compared to a median estimate of +3.2%.
- "Seasonally adjusted private sector annual wage growth was unchanged from the December quarter at 3.3 per cent. Annual public sector wage growth was higher than the private sector at 3.6 per cent in the March quarter 2025, up from 2.9 per cent in the December quarter 2024." (per ABS)
- Home-loan values fell 1.6% q/q (estimate 0%) in Q1 versus a revised +1.3% in Q4. Owner-occupied home loan values fell 2.5% q/q versus a revised +3.7% in Q4.
- Cash US tsys are flat to 1bp cheaper in today's Asia-Pac session after being little changed yesterday following the release of April CPI data.
- Cash ACGBs are 5-7bps cheaper with the AU-US 10-year yield differential at +2bp.
- The bills strip has bear-steepened, with pricing -1 to -8.
- RBA-dated OIS pricing is mostly firmer across meetings today, with early 2026 leading. A 25bp rate cut in May is given a 95% probability, with a cumulative 77bps of easing priced by year-end (based on an effective cash rate of 4.09%).
