JGBS: Slightly Mixed, Machine Orders Stronger, Trade Balance In-Line
In Tokyo morning trade, JGB futures are little changed, +3 compared to settlement levels.
- Japan June core machine orders were better than forecast. We rose 3.0%m/m, versus -0.5% forecast and -0.6% prior. The y/y print was 7.6%, against a 4.7% forecast and 4.4% prior. Today's machine orders print continues to paint a resilient capex picture for Japan's economy.
- Japan July export and import outcomes were fairly close to market expectations, but the trade balances were slightly weaker. Exports fell -2.6%y/y (-2.1% forecast and -0.5% prior), while imports were -7.5%y/y, (-10.0% forecast and 0.3% prior). The trade deficit was -¥117.5bn, against a ¥198.5bn forecast. In seasonally adjusted terms we printed at -¥303bn, against a -¥67.2bn forecast (June's outcome was -¥247.6bn).
- US tsys are little changed in today’s Asia-Pac session.
- Cash JGBs are slightly mixed across benchmarks, with yields 1.5bps lower (7-year) to 1bp higher (40-year). The benchmark 10-year yield is 1bp lower at 1.592% versus the cycle high of 1.616%.
- Swap rates are flat to 1bp higher, with a steepening bias.
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