Futures Extend Move Lower, Curve Twist Steepens, Swap Spreads Widen

JGB futures add to the bearish impulse derived from U.S. Tsy price action on Friday, extending through post-Tokyo lows registered ahead of the weekend, last sitting -30, just above their early Tokyo base. Wider cash JGB trade has seen some twist steepening, with the major benchmarks running 1.0bp richer to 1.5bp cheaper, little changed to richer through 5s and cheaper beyond that point. Cash 10s trade around 0.48% in yield terms, 2bp off the BoJ’s YCC cap. Swap spreads are wider across the curve, pointing to payside swap flows adding an extra layer of pressure to the JGB weakness (once again most likely influenced by Friday’s broader price action). Local headline flow has been limited since the re-open.