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Futures Follow Cross-Market-Derived Flows, Wings More Resilient

JGBS

The previously alluded to cross-market-driven flows observed across the wider core global FI space were in play in JGB futures, which extended on their marginal overnight cheapening, before bouncing from worst levels to hit the lunch bell -12. Cash JGBs are 1bp cheaper to 2bp richer, with 20s outperforming even with the presence of impending 20-Year JGB supply noted, while the 3- to 7-Year struggled (7s driven by the weakness in futures). The swap curve has twist flattened, pivoting around 20s.

  • Domestic headline flow was fairly subdued, with Finance Minister Suzuki going over well-trodden rhetoric re: the FX market, while soon-to-be departing BoJ Governor Kuroda reaffirmed the Bank’s view on inflation.
  • The aforementioned 20-Year JGB auction headlines the local docket this afternoon.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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