Futures Holding Cheaper, Cash US Tsys Open After Holiday

JGB futures are holding cheaper, -4 compared to settlement levels.

• Cash US tsys are 0.5bp cheaper to 3bp richer across the major benchmarks after being closed yesterday for the Independence Day holiday. The curve is steeper.
• Jibun Bank and IHS Markit release June composite PMI. The index falls to 52.1 from 54.3 in May; a year ago 53. It was the lowest reading since Feb. 2023. New orders fall to 53.3 vs 54.7 in May.
• Cash JGBs are richer across benchmarks with the benchmark 10-year yield 1.4bp lower at 0.373%, below the BoJ's YCC limit of 0.50%. Today’s dealing comes after yesterday’s 10-year auction showed solid demand with the low-price exceeding forecasts, the cover ratio reaching a four-month high of 4.024x, and the tail narrowing to its lowest level in four months. According to Bloomberg, MUFJ-MS bought 35.3% of 10-Year JGBs auctioned yesterday (See link).
• The swaps curve has twist flattened with swap spreads wider.