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Futures Holding Stronger At Lunch Ahead Of 30Y Supply

JGBS

At the Tokyo lunch break, JGB futures are stronger, 24 compared to settlement levels, ahead of 30-year supply.

  • Outside of the previously outlined weekly International Investment Flow data, there hasn't been much in the way of domestic drivers to flag.
  • According to MNI’s technicals team, futures faded into the tail-end of last week, putting pressure on nearby support and prompting a poor weekly close. The break lower from here has seen 142.85 - the late May low - give way, with the 142.06 1.0% 10-DMA envelope and 142.00 handle and 141.65 further out - a Fibonacci projection.
  • Cash US tsys are closed for the 4th of July holiday.
  • Cash JGBs are flat to 1bp cheaper, with the 40-year underperforming. The benchmark 10-year yield is 0.5bp lower at 1.081% ahead of today’s 30-year auction.
  • The 30-year auction is taking place with an outright yield that is around 15bps higher than the early June offering and around its cycle high.
  • On the negative side, today's auction occurs amidst discussion about the outlook for the BoJ’s quantitative tightening, the details of which will be released at the late July MPM.
  • The swaps curve has bear-steepened, with rates flat to 2bps higher. Swap spreads are wider.
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At the Tokyo lunch break, JGB futures are stronger, 24 compared to settlement levels, ahead of 30-year supply.

  • Outside of the previously outlined weekly International Investment Flow data, there hasn't been much in the way of domestic drivers to flag.
  • According to MNI’s technicals team, futures faded into the tail-end of last week, putting pressure on nearby support and prompting a poor weekly close. The break lower from here has seen 142.85 - the late May low - give way, with the 142.06 1.0% 10-DMA envelope and 142.00 handle and 141.65 further out - a Fibonacci projection.
  • Cash US tsys are closed for the 4th of July holiday.
  • Cash JGBs are flat to 1bp cheaper, with the 40-year underperforming. The benchmark 10-year yield is 0.5bp lower at 1.081% ahead of today’s 30-year auction.
  • The 30-year auction is taking place with an outright yield that is around 15bps higher than the early June offering and around its cycle high.
  • On the negative side, today's auction occurs amidst discussion about the outlook for the BoJ’s quantitative tightening, the details of which will be released at the late July MPM.
  • The swaps curve has bear-steepened, with rates flat to 2bps higher. Swap spreads are wider.