Cash Bonds Little Changed, 40Y Supply Tomorrow

JGB futures are unchanged compared to the settlement levels and sit in the middle of today's range.

• There hasn’t been much in the way of domestic drivers to flag. April Tokyo condominiums for sale are on tap later.
• After yesterday’s modest sell-off, cash US tsys have slightly bull-steepened in today’s Asia-Pac session. The US data calendar is light until mid-week. The focus is on the minutes from the May 1 FOMC on Wednesday.
• Cash JGBs are slightly mixed, with yield movements bounded by +/- 0.7bp. The benchmark 10-year yield is 0.1bp lower at 0.980% after reaching 0.984% earlier, its highest level since 2013, on speculation of further BoJ rate hikes and reduced debt-purchase amounts at operations.
• The breakeven inflation rate for the 10-year CPI-linked bonds rose 2bps to 1.644%.
• The swaps curve has twist-flattened, pivoting at the 3s, with rates 0.4bp higher to 1bp lower. Swap spreads are mixed.
• Tomorrow, the local calendar sees Trade Balance and Core Machine Orders alongside 40-year supply.