Futures Holding Weaker, Heavy Local Calendar Tomorrow

JGB futures remain weaker, -7 compared to settlement levels, after dealing in a relatively narrow range in today’s Tokyo session.

• There hasn’t been much in the way of domestic drivers to flag, with Leading & Coincident Indices due later today.
• (Bloomberg) “I would expect the BoJ to end the negative rate in April, but cannot deny the possibility of that to happen in March,” says Inadome, a senior strategist at Sumitomo Mitsui Trust Asset Management. (See link)
• Today’s BoJ Rinban operations showed positive spreads, but lower offer cover ratios across the 5-10-, 10-25- and 25-year+ buckets. On balance, the results are consistent with the mildly weaker open to the Tokyo afternoon session.
• Cash US tsys are dealing flat to 1bp richer in today's Asia-Pac session, with newsflow light.
• The cash JGB curve has bear-steepened, with yields flat to 3bps higher. The benchmark 10-year yield is 0.5bps higher at 0.698% versus the Nov-Dec rally low of 0.555% and the February high of 0.770%.
• The swaps curve has also bear-steepened, with rates flat to 3bps higher. Swap spreads are tighter out to the 30-year.
• Tomorrow, the local calendar sees Retail Sales, International Investment Flows, Industrial Production and Housing Starts data. The MoF also plans to sell Y2.9bn of 2-year JGBs.