10-year JGB futures have drifted lower in a....>

JGBS: 10-year JGB futures have drifted lower in a quiet session falling 2 ticks

to trade at 150.15 last. The failure to overcome the 150.22 resistance level

yesterday returned the focus to the downside where it remains. 

- The 10-year yield found some support at the 0.14% level but remains flat on

the day at 0.145%. 

- Breakevens have extended their losses keeping upside pressure on 10-year

yields, currently -36.8bps.

- The rolling correlation between 10-year yields and 10-year breakevens has

returned to positive after the brief negative period that followed the spike in

yields in late-July. This shows that rising yields are no longer weighing on

inflation expectations which supports the continued yield rise.

- The Japanese Ministry of Finance (MOF) sold Y3.471trn of 3-month Discount

Bills today with an average yield of -0.2943% (prev. -0.2847%) and average price

of 100.0791 (prev. 100.0765).