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Slightly Weaker. No, It's Not Japan
Slightly Weaker. No, It's Not Japan
There was a fair amount of momentum among financial news sources regarding the potential significance of last night's Bank of Japan (BOJ) announcement to the U.S. bond market. While it was clearly relevant for Japan, it's hard to make the case that it had any impact on overnight Treasury trading. It's always worth remembering that Japan's biggest impacts on the U.S. bond market are driven by the Ministry of Finance (MOF) and not the BOJ. In any event, today's chart shows the relative movement in USD/Yen (the easiest place to see BOJ impacts) and Treasuries. 10yr yields were perfectly flat for an hour after the initial announcement. More strikingly, yields were a hair lower from 1:30am to 3:00am when $/Y was surging during the press conference.
Sideways at modestly weaker levels. MBS down 2 ticks (.06) and 10yr up 2.1bps at 4.143
Decent recovery into 11am, but fading a bit now. MBS down 3 ticks (.09) and 01yr up 2.7bps at 4.148
Limited Follow-Through After Shockingly Big Miss
| Time | Event | Period | Actual | Forecast | Prior |
|---|---|---|---|---|---|
| Friday, Dec 19 | |||||
| 9:20AM | NY Fed Bill Purchases 1 to 4 months (%) | $8.165 million | |||
| 10:00AM | Dec Sentiment: 5y Inflation (%) | Dec | 3.2% | 3.2% | 3.4% |
| 10:00AM | Dec U Mich conditions | Dec | 50.4 | 50.7 | 51.1 |
| 10:00AM | Dec Consumer Sentiment (ip) | Dec | 52.9 | 53.4 | 51.0 |
| 10:00AM | Dec Sentiment: 1y Inflation (%) | Dec | 4.2% | 4.1% | 4.5% |
| 10:00AM | Nov Exist. home sales % chg (%) | Nov | 0.5% | 1.2% | |
| 10:00AM | Nov Existing home sales (ml) | Nov | 4.13M | 4.2M | 4.1M |
| Monday, Dec 22 | |||||
| 9:20AM | NY Fed Bill Purchases 4 to 12 months (%) | $6.801 million | |||
| 1:00PM | 2-Yr Note Auction (bl) | 69 | |||
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