BOJ: Rinban Purchases

The Australian Office of Financial Management (AOFM) sells A$800mn of the 3.00% 21 November 2033 Bond, issue #TB166:

• Average Yield: 4.355% (prev. 4.2409%)
• High Yield: 4.3575% (prev. 4.2425%)
• Bid/Cover: 2.6562x (prev. 2.9688x)
• The amount allotted at the highest accepted yield as a % of the amount bid at that yield: 88.9% (prev. 55%)
• Bidders: 35 (prev. 40), successful 15 (prev. 15), allocated in full 9 (prev. 7)

In Tokyo morning trade, JGB futures are weaker, -17 compared to settlement levels.

• (MNI) Japan's exports posted their fourth straight y/y rise in March thanks to solid exports of automobiles and ships, data released by the Ministry of Finance.
• Exports of automobiles rose 7.1% in March following February's 19.8% gain while vessel shipments rose 36.0% vs. the prior month's 20.0%. Imports fell 4.9% y/y in March, reversing from 0.5% in February for the first drop in two months.
• Japan posted a trade surplus of JPY366.5 billion, its first in three months following February's JPY377.8 billion deficit.
• Cash JGBs are cheaper across the curve, with yields 0.1bp (4-5-year) to 1.6bps (1-year) higher. The benchmark 10-year yield is 0.5bps higher at 0.876% versus the YTD high of 0.884%, set yesterday.
• The swaps curve has twist-steepened, with rates 3bps lower to 1bp higher. Swap spreads are tighter.
• Today, the local calendar also sees BoJ Rinban operations covering 1- to 25-year JGBs.

Oil prices ended Tuesday close to flat with heightened tensions in the Middle East offset by a stronger greenback (USD index +0.4%) as Fed cuts appear delayed, a large US inventory build and increased Russian crude output. The market is monitoring developments closely with Israel stating it has to respond to Iran’s attack. Prices have risen around 18% this year and second-round effects on other costs will be watched closely.

• WTI fell 0.1% to $85.31/bbl and has started the APAC session slightly higher at $85.35. It fell to a low of $84.75 during the European session before recovering somewhat and range trading. The benchmark is now up 2.6% in April. WTI remains in an uptrend with resistance at $87.67 and support at $83.86.
• Brent was steady and finished at $90.09/bbl to be up 3.6% this month. It fell below $90 during European trading and made a low of $89.41. It has started today at $90.02. The benchmark is consolidating but the bull cycle remains in place and moves lower are considered corrective. Initial resistance is at $92.18, April 12 high, and support at $88.10, 20-day EMA.
• Bloomberg reported that US crude stocks rose 4.09mn barrels last week, according to people familiar with the API data. But with refined products seeing inventory drawdowns, gasoline -2.5mn and distillate -427k, this may be a stock build to refine for the driving season. The official EIA data is out later today.