Futures Downtick In Overnight Trading, Awaits Q1 GDP & 20-year Supply

JGB futures downtick in post-Tokyo trade, closing -2 compared to settlement levels, after US tsys cheapen in NY trade. After the bell, cash tsys were 1-7bps cheaper across the major benchmarks with the curve flatter. The latest round of US data saw US tsys pressured with US Retail Sales ex-autos and gasoline, Industrial Production and NAHB Housing Market Index all firmer than expected. A brisk pace of corporate issuance added a further layer of pressure. Risk off flows, fuelled by concerns over the US debt ceiling, however, moderated the lift in US tsy yields. President Biden noted that the latest round of talk was productive.

• MNI's technical analyst reports that the JGB futures' continued appreciation indicates an extension of the present short-term bull cycle. Investors are now focusing on the March 22 high of 149.53. A break of this level would confirm a resumption of the uptrend. To the downside, the 50-dma provides support at 147.31, just above the April 18 low.
• The local calendar heats up today with the release of Q1 GDP (preliminary), March Industrial Production (final) and March Capacity Utilisation. BBG consensus expects annualised growth of +0.8% in q/q terms after +0.1 in Q4, although some analysts believe cost of living increases could curtail real consumer spending more than expected.
• The MoF plans to sell Y1.2tn of 20-year JGBs today.