A Muted Morning

JGB futures nudged a little lower (when compared to our previous update), hitting the Tokyo lunch bell +26, a touch over 20 ticks shy of their overnight peak. This took place even as domestic equities moved away from best levels as participants reacted to the fact that U.S. Tsy futures continue to operate shy of Friday’s peak. That left the major cash JGB benchmarks running 0.5-2.0bp richer across the curve, with 7s leading on the back of the bid in futures, while swap spreads are wider across the curve. Local headline flow has been limited, with continued rhetoric surrounding the Sakhalin 2 situation providing nothing in the way of meaningful impact for markets.