Bear-Flattener Remains But Early Yield Rise Has Been Pared

JGB futures are stronger, +10 compared to the settlement levels on Friday.

• (Reuters, ICYMI) Japan's parliament plans to hold a special session on Aug. 23 to discuss the central bank's decision last month to raise interest rates. The special session, to be conducted by the lower house financial affairs committee, is likely to ask BoJ Governor Ueda to attend, said the sources, who declined to be identified.
• Outside of the previously outlined PPI data, there hasn't been much in the way of domestic drivers to flag. Machine Tool Orders data (prelim) is due later today.
• Cash US tsys are little changed in today’s Asia-Pac session. Tuesday’s focus in the US will be on US PPI data and Richmond Fed Bostic. PPI data will be scrutinised for categories that feed through to the Fed’s preferred inflation gauge, the personal consumption expenditures price index.
• The cash JGB curve continues to hold a slight bear-flattening but yield movements have been pared in the afternoon session. Yields currently sit flat to 2bps higher. The benchmark 10-year yield is 0.4bps higher at 0.857%.
• Swaps rates are ~1bp lower out to the 10-year zone, and 1-6bps higher beyond. Swap spreads are tighter out to the 10-year.
• Tomorrow, the local calendar is empty apart from 5-year supply.