​Futures Flat, Narrow Range, Curve Flatter

JGB futures sit flat, off the extremes of a narrow range after domestic economic data failed to provide a meaningly local driver for the market. US Tsys also provided little in way of a catalyst with pricing basically unchanged in Asia-Pac trade.

• JBM3 is currently trading at 147.44, within the range of 147.40-147.92, where it has remained since early April. In the past two days, the JGB futures contract briefly fell below the lower limit of this range twice, but managed to bounce back.
• Cash JGBs are mixed with yields out to the 10-year 0.5bp richer to 0.2bp cheaper and beyond 1.6-3.0bp richer. The benchmark 10-year yield is 0.1bp higher at 0.476%, below the BoJ's YCC limit of 0.50%.
• Swap spreads are wider across the curve, with the swap curve twist flattening.
• Looking ahead, trade balance and weekly international security flow data headline domestically on Thursday, with 20-Year JGB supply also due.
• Participants also remain on the lookout for some of the more sizable life insurer and pension fund investment plans, which should filter out of the coming 10 days or so (see more on that here).