Futures Cheaper Overnight But National CPI Lower Than Expected

In post-Tokyo trade, JGB futures were weaker, closing -19 compared to settlement levels.

• However, National CPI for May has printed weaker than expected across the measures: Headline +2.8% y/y versus +2.9% est; Core +2.5% y/y versus +2.6% est; Core Core +2.1% y/y versus +2.2% est. This should support the market in the early rounds of morning trade.
• Overnight, US tsys finished mid-range, with yields 2-5bps higher. The benchmark 2-year yield finished 3bps higher at 4.74%, while the 10-year was 4bps cheaper at 4.26%.
• US data was softer than expected across the board: Housing Starts (1.277M vs. 1.37M est), MoM (-5.5% vs. 0.7% est), Building Permits (1.386M vs. 1.45M est), MoM (-3.8% vs. 0.7% est). Weekly Claims a little higher than expected at 238k vs. 235k est, continuing claims 1.828M vs. 1.810M est.
• Elsewhere, the BoE left its policy rate unchanged as expected, with a 7-2 vote split. Two officials voted to cut rates by 25bps. On the other hand, the Swiss National Bank cut its policy rate by 25bps to 1.25%. Only two-thirds of the move was priced by the market.
• Today, the local calendar will also see Jibun Bank PMIs (Preliminary).