Cash Bonds Little Changed At Lunch

At the Tokyo lunch break, JGB futures are holding slightly weaker, -5 compared to the settlement levels, after dealing in a relatively narrow range in today’s session.

• Outside of the previously outlined Q2 GDP, there hasn't been much in the way of domestic drivers to flag. The local calendar will see June Capacity Utilisation and Industrial Production data later.
• The GDP print was in line with BoJ's official view, which had expected private consumption to rebound, and was higher than MNI's median forecast which pointed to a 0.5% q/q rise, or an annualised 2.2%.
• Cash US tsys are little changed in today’s Asia-Pac session.
• Cash JGBs are little changed, with yield swings bounded by +/- 0.5bp. The benchmark 10-year yield is unchanged at 0.822% versus the cycle high of 1.108%.
• This morning’s BoJ Rinban operations saw positive spreads and higher offer cover ratios, apart from the 25-year+ bucket (1-3-year: 4.12x, 5-10-year: 3.03x, 10-25-year: 2.75x and 25-year+: 2.49x), which may generate some slight pressure in early rounds of the Tokyo afternoon session.
• Swaps rates are little changed out to the 5-year zone and 1-5bps higher beyond, led by the 30-year.