Cash Bonds Twist-Flatten, National CPI Tomorrow

JGB futures are weaker but well off session lows, -16 compared to the settlement levels.

• Outside of the previously outlined Trade Balance data, there hasn't been much in the way of domestic drivers to flag.
• Cash US tsys are 1-2bps cheaper in today’s Asia-Pac session, with a slight flattening bias.
• Earlier, Biden was confirmed to have COVID-19, this follows comments he made saying he would potentially drop out if diagnosed with a "medical condition". The betting markets have swung again after this news with Kamala jumping 25pts to 47%, while Biden has dropped 26pts to 44% chance of being the Democratic Party nominee.
• The cash JGB curve has twist-flattened, pivoting at the 20s, with yields 1.5bps higher to 1.5bps lower. The benchmark 10-year yield is 0.6bps higher at 1.047% versus the cycle high of 1.108%.
• The swaps curve has bear-steepened, with rates flat to 3bps higher. Swap spreads are wider.
• “Japan sold ¥349.60 billion of 5-year climate transition notes in line with expected cut-off yield with higher bid-to-cover ratio (4.04x) than the previous auction (3.39x), signalling solid investor demand.” (as per BBG)
• Tomorrow, the local calendar will see National CPI data.