JGB prices finished marginally higher following the BoJ's decision to conduct further monetary easing. (RANsquawk)
The BoJ have eased monetary policy further by boosting asset purchases by JPY 10trl, more than markets had expected, and will buy longer-term government bonds in a show of resolve to pull the economy out of deflation. The board voted unanimously on the additional easing action. The board also voted unanimously to keep their overnight call rate range unchanged at 0.0% to 0.1%. The BoJ now expect CPI to near the 1% goal toward the latter half of the projection period. (RTRS)
Japanese Markit/JMMA Manufacturing PMI (Apr) M/M 50.7 (Prev. 51.1)
Japanese National CPI (Mar) Y/Y 0.5% vs. Exp. 0.4% (Prev. 0.3%)
Japanese Industrial Production (Mar P) M/M 1.0% vs. Exp. 2.3% (Prev. -1.6%)
Japanese Industrial Production (Mar P) Y/Y 13.9% vs. Exp. 15.6% (Prev. 1.5%)
Japanese Vehicle Production (Mar) Y/Y 143.7% (Prev. 19.7%) (Sources)
Chinese Industrial Profits (Mar) M/M -1.3% (Prev. -5.2%) (Sources)
The IMF have said Asian policymakers should be ready to tighten policy as overheating pressures emerge. The IMF report also highlights that a sharp correction in China's property market could spur a hard landing. (Sources)
The Saudi Finance Minister said Saudi Arabia will not buy European sovereign debt directly, but is helping via the IMF. (RTRS)
T-notes outperformed for yesterday thanks to some below-par earnings from European financial names and a slight decrease in the corporate issuance slate, desks also noted JPY strength adding to inflows observed in the belly of the curve. The 7y note auction was reasonably strong, with the lowest yield on record at this maturity and stopping through the WI by over 0.5bps. Bond markets did come off their best levels as equities remained strong, some unconfirmed month-end asset reallocation talk seeing the 10y note future soften in the final 90 minute of floor trade. At the pit close, t-notes settled at 131.29+, up 7+ ticks. Finally, the DJIA finished at 13204.77, up 0.67%; the NDX finished at 2725.23, up 0.58%; and the SPX finished at 1400.01, up 0.67%. T-notes were seen trading up 18 ticks at 132.15+ heading into the EU session, receiving a boost overnight following renewed concerns surrounding Spain, as S&P downgrading the countries credit rating. Last price taken at 0635BST. (RANsquawk)
The USD 29bln 7y note auction gave a record low yield of 1.347% vs. exp. 1.357%, with the WI stopping at 1.355%; the B/C 2.83 vs. avg. 2.88 (prev. 2.72); indirects accounted for 38.2% vs. avg. 39.66% (prev. 41.72%), and the allotted at high was 64.06%. (RTRS)
US Fed balance sheet liabilities shrank to USD 2.849trln as of Apr 18 vs. USD 2.885trl the prev. week, foreign central bank holdings of US debt rose USD 5.271bln to USD 3.484trl as of Apr 18, Fed holdings of US Treasuries totalled USD 2.610trln as of Apr 18 vs. 2.623trl the prev. week, Fed holdings of agency debt totalled USD 94.57bln as of Apr 11 vs. USD 95.20bln from the prev. week, Fed holdings of MBS totalled USD 847.8bln of Apr 11 vs. USD 855.36bln the prev. week. (RTRS)
Fed's Lacker has said the Fed will likely need to start raising interest rates in mid-2013 as the economic conditions do not warrant super-low rates through to late 2014. (Sources)
BarCap US Treasury month end extension seen at +0.01yrs.
Standard & Poor's have downgraded Spain's long- and short-term sovereign credit rating by two notches to BBB+ and A2 from A and A1 respectively. S&P have also placed the country on negative outlook. The ratings agency has taken the action as it expects the Spanish economy to contract during 2012 and 2013 and expects their budget trajectory is likely to deteriorate against the backdrop of a worsening economy. S&P have said that further downgrades are possible should Spain's net government debt rise above 80% of GDP before 2014. (FT-More) Spain has responded to the ratings action saying that the downgrade does not take into account reforms announced by the government to reactivate the economy.
Standard & Poor's have affirmed Ireland's long- and short-term ratings at BBB+ and A2; outlook negative. S&P have said the ratings could come under pressure if Ireland were to lose its access to funding from the ESM following their referendum. (Sources)
Italian PM Monti has added to criticisms of the austerity-led reform efforts in the Eurozone, saying that the policies were shrinking Europe's economy and could deepen a double-dip recession. (FT-More) Monti added that budget discipline is needed, but it must be accompanied by policies that drive economic demand.
All six of the Dutch parliamentary factions approved the Dutch 2013 budget deal, and the Dutch Finance Minister De Jaeger, who believes the deal will make the 3% budget deficit target within reach, sent the letter to parliament (RTRS)
French President Sarkozy has promised new controls on immigration in an effort to appeal to France's right-wing voters before the second round of elections on May 6th. (FT-More)
BarCap Pan Euro Agg month end extension seen at +0.11yrs.
According to the NY Fed, total USD swap borrowings totalled USD 32bln in latest week vs. prev. USD 32.371bln, new USD swap borrowings totalled USD 0.876bln in latest week vs. prev. USD 1.276bln. (Sources)
US Treasury Secretary Geithner said the CNY needs to appreciate further against USD, adding that China needs to reform their financial system and China's interest rates should better reflect markets forces. (Sources)
WTI crude futures dropped from its highest level in almost four weeks, after Spain's credit rating was cut by S&P prompted some renewed concerns surrounding the Eurozone and may curb fuel demand. Last price taken at 0635BST. (RANsquawk)
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