Futures Higher After Holiday, Cash JGBs Dealing Mixed

JGB futures are richer, +9 compared to settlement levels, after returning from yesterday’s holiday.

• JGB futures faltered again on Friday, cracking support at 147.34 to accelerate a brief move lower, according to MNI’s technicals team. Markets were content to buy on dips, helping move markets back toward flat ahead of the close. This mirrored the strength in US bond markets following the soft CPI, helping keep the upside impetus intact for now. Key resistance lies ahead at 149.21/53, highs from May and March. Clearance of these levels would highlight an important break.
• JGB futures have a downside bias into the Japan inflation report due on Friday, according to Bloomberg. (See link)
• Cash JGBs have opened mixed with yield movements bounded by 0.7bp lower (7-year) to 1.1bp higher (30-year). The benchmark 10-year yield is 0.1bp higher at 0.482%, below the BoJ's YCC limit of 0.50%, but just shy of its highest level in three months.
• The swaps curve has bull flattened with rates flat to 0.9bp lower. Swap spreads are wider out to the 5-year and wider beyond.
• On the data front we have the tertiary activity index for May on tap later (market consensus is for a gain of 0.4%, versus 1.2% prior).