Futures Holding Weaker At Lunch

At the Tokyo lunch break, JGB futures are weaker, -7 compared to the settlement levels, after dealing in a relatively narrow range.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined PPI Services. Final Feb machine tool orders are due later.
• Recent weakness in JGBs resulted in a low print of 144.90 in recent weeks. According to MNI’s technicals team, a stronger reversal higher is required to signal the end of the recent corrective phase. The bull trigger has been defined at 147.74, the mid-January high. A break would resume the uptrend. Moving average studies remain in a bull-mode set-up, highlighting an uptrend. For bears, a resumption of weakness would potentially open the 144.60 support.
• Cash US tsys are dealing 1bp richer in today's Asia-Pac session after yesterday's 4-5bps cheapening across benchmarks.
• Cash JGBs are slightly mixed, with yields -0.5bp to +0.5bp. The benchmark 10-year yield is 0.5bp higher at 0.739% versus the YTD high of 0.801% set on March 15.
• The swaps curve has twist-steepened, pivoting at the 20s, with rates 3bps lower to 2bps higher. Swap spreads are tighter out to the 10-year and wider beyond.