Futures Bounce On U.S. Data, 10-Year JGB Supply Now Eyed

Softer than expected U.S. manufacturing ISM data allowed JGB futures to firm in overnight trade, with the contract adding 19 ticks come the end of the post-Tokyo session, finishing a touch shy of best levels. The impact of the U.S. data release provided a very different feel to what was seen at the time of Tokyo close on Monday,

• Note that the contract respected Monday’s Tokyo session low on a test during the early rounds of overnight dealing.
• Local headline flow has been fairly subdued since yesterday’s close,
• 10-Year JGB supply provides the focal point of today’s domestic docket, although the stabilisation in core global FI markets on Monday (after the early oil-driven cheapening) will likely be enough to entice a baseline level of demand.
• Monetary base data rounds off the domestic docket on Tuesday.