Futures At Session Cheaps, Fresh Cycle High For 10Y Yield, CPI Data Tomorrow

JGB futures push to a fresh session low of 144.56, -41 compared to the settlement levels, in the Tokyo afternoon session.

• According to MNI's technical team, recent weakness has confirmed a resumption of the medium-term downtrend and paved the way for weakness towards 144.15, the Jan 13 low and major support. On the upside, clearance of 146.41, the Sep 4 high would instead highlight a base and a possible short-term reversal.
• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined trade balance and international investment flow data.
• Accordingly, local participants have likely sought guidance from US tsys. So far in Asia-Pac dealings, US tsys have extended weakness in yesterday’s NY session. Cash US tsys are 2 to 5bps cheaper.
• Cash JGBs are cheaper, with the belly of the curve showing a relatively weaker performance led by the futures-linked 7-year (3.8bps cheaper). The benchmark 10-year yield is 3.4bps higher at 0.843%, just shy of the cycle high of 0.848% set earlier today.
• Swap rates are higher, with the belly also underperforming. Swap spreads are mixed across maturities.
• Tomorrow the local calendar sees National CPI data for September.