Futures Continue To Trickle Lower

The early afternoon session impulse from the bid in U.S. Tsys subsides as U.S. fixed income consolidates a little off richest levels of the day, allowing JGB futures to drift lower, printing fresh Tokyo session lows in the process. That leaves the contract +22 at typing, with around half of the overnight session gains now pared. The curve has twist steepened, with 7s outperforming on the move in futures since yesterday’s settlement, while 40s are the only major benchmark to sit cheaper on the day, as the major cash JGBs run 2.5bp richer to 0.5bp cheaper. Swap rates also continue their tick away from session lows, in sympathy with the moves in JGB yields. Local headline flow remains relatively non-existent.