Futures Cheaper, UK & EU Bond Yields Higher

In post-Tokyo trade, JGB futures are weaker, closing -10 compared to settlement levels, after US tsy futures cheapen on Monday. TYU3 is currently dealing at 112-23+, -0-10, in line with levels seen late in yesterday's European session. Cash tsys re-open today after being closed yesterday for the observance of a US holiday.

• US tsy futures weakened, mirroring the performance of UK and European bonds. The 2-year Gilt yield was 14bp higher ahead of the BoE policy decision on Thursday. Consensus expects another strong UK CPI print (Wed) and a hawkish 25bp hike from the BoE.
• European bond yields experienced an upward push, partly influenced by the hawkish remarks made by the ECB's Schnabel. She noted that inflation risks lean towards the upside, highlighted the limitations of prolonged inflation above 2%, and emphasised the importance for the central bank to prioritise potentially doing more rather than less.
• Bloomberg reports that SoftBank Corp., the mobile unit of Masayoshi Son’s Japanese conglomerate plans to sell about 50 billion yen ($352 million) of bonds, taking advantage of receding uncertainty about the Bank of Japan’s near-term monetary policy and improved sentiment in global credit markets. (see link)
• The local data calendar has the final April Industrial Production readings, along with April Capacity Utilisation out today. The final May Machine Tool Orders print is also due.