Futures Holding Uptick, Narrow Range Ahead of Q1 GDP & 20-Year Supply

During the afternoon trading session in Tokyo, JGB futures have been trading within a narrow range and are slightly stronger at +7 compared to the settlement levels. Since there are no domestic data releases or supply-side factors affecting the market, local traders have been focused on monitoring US tsys as they await the release of the Euro Area's Q1 GDP and US Retail Sales later today.

• Cash US tsys are 2-3bp lower in early Asia-Pac trade, assisted by disappointing monthly economic data from China.
• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined news that the Japanese government will allow seven of the nation’s major power companies to raise household electricity prices by between 14% to 42%.
• Cash JGBs are slightly stronger across the curve apart from the 1-year and 3-year zones. Yields are 0.1-0.9bp lower with the 30-year the strongest The benchmark 10-year yield is 0.2bp lower at 0.405%, after yesterday’s 1.6bp increase.
• Swap rates are flat to 1.0p lower out to the 20-year zone, and slightly higher beyond. Swap spreads tighter out to the 10-year zone and wider beyond.
• The local calendar heats up tomorrow with the release of Q1 GDP and 20-year JGB supply.