Curve Steepens, Futures Nudge Lower

The impetus from Friday’s cheapening in U.S. Tsys, coupled with a rally in domestic equities and a lack of a meaningful richening in core global FI markets (indeed Tsys have extended their weakness since the Japanese lunch break got underway) left JGB futures -9 come the Tokyo break, with the contract oscillating in the lower half of its overnight session range during the morning session. Cash JGBs run 0.5-2.5bp cheaper across the curve, with steepening in play. The summary of opinions from the BoJ’s latest monetary policy decision offered little in the way of actionable headline flow, while domestic news flow focused on supply/demand imbalances in the energy space.