Futures Holding In Positive Territory, New Post-YCC Tweak High For 10Y Yield

In the Tokyo afternoon session, JGB futures are holding in positive territory, +4 compared to the settlement levels, after trading in a relatively narrow range in the morning session.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined Jibun Bank PMIs.
• US tsys sit flat to 2bp richer across the major benchmarks, with a light bull steepening apparent. There has been little meaningful macro newsflow.
• The cash JGB curve has twist steepened, pivoting at the 3s, with yields 0.1bp lower to 0.9bp higher. The benchmark 10-year yield is 0.9bp higher at 0.675%, close to the post-YCC tweak high.
• The swap curve has bear steepened, with rates flat to 0.9bp higher. Swap spreads are wider, after being tighter in the morning session.
• Tomorrow the local calendar sees Weekly International Investment Flow data, ahead of Tokyo CPI data for August on Friday. Later today sees Machine Tool Orders for July (Preliminary).
• Flash PMIs from France, Germany and the Eurozone provide the highlight in today's European session, further out we have US new home sales and S&P Global PMIs. The latest 20-year supply is also due.
• Tomorrow the MoF plans to conduct Liquidity Enhancement Auctions for OTR 15-5-39.9-year JGBs.