Halister News

Economic Release Details: {GRIFPBUS Index ECOD} --PAUL GORDON

(Bloomberg) -- Bund futures (RX1) technical levels in focus.

• Daily Trend Bias: Bullish
• Comment: Bulls make significant headway after a comfortable break above the 164.64 resistance; attention falls on June peaks at 165.44-55; immediate support at 164.62-57
  • Resistance: 164.74 (pivot); 164.89; 164.99; 165.11; 165.34; 165.44-55
  • Support: 164.62-57 (strong); 164.50-47; 164.30-22 (13-EMA); 164.05-00
• NOTE: Roll-adjusted by difference in GFUT
• NOTE: Sejul Gokal is a FICC technical strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice

To contact the reporter on this story: Sejul Gokal in London at sgokal1@bloomberg.net To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net Keith Jenkins

(Bloomberg) -- The continued decline in JGB yields even as the Bank of Japan cut 10-year bond purchases today, raises the chance of a further reduction at its regular operations next week, according to Akio Kato, general manager of trading at Mitsubishi UFJ Kokusai Asset Management Co. in Tokyo.

• Impact from the scarcity of available bonds due to BOJ’s aggressive bond buying scheme is becoming increasingly evident, leading to insensitivity of yields
• The continued rally in the bond market even after BOJ reduced its purchases will enhance the central bank’s ability to further scale back its buying until markets reverse and slump, pushing yields higher
• BOJ is scheduled to buy bonds with 1-3 and 3-5 year maturities next Monday
  • If it does cut back purchases and markets continue to rally, the central bank may follow with another reduction at its Wednesday operations for longer maturities
• But this raises question about the compatibility with BOJ’s target of buying around 80 trillion yen annually, as its actual purchase has probably fallen to around 60 trillion or less
• NOTE: 10-year JGB yield falls to 0.015%, lowest since May 2; 2-year yield dips to lowest since June 1 of -0.16% and 5-year yield touches -0.135%, lowest since May 10
• NOTE: BOJ cuts 5-to-10 year bond buying on Friday by 30b yen to 410b yen

--With assistance from 山中 英典. To contact the reporter on this story: Chikako Mogi in Tokyo at cmogi@bloomberg.net To contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net Patricia Lui

--RICHARD FROST

Economic Release Details: {JNCPIXFF Index ECOD} --HIROSHI MIYAZAKI