Futures Holding Weaker, Narrow Range Ahead Of US CPI & Jobless Claims

In the Tokyo afternoon session, JGB futures are holding the morning’s early losses, -29 compared to settlement levels, after trading in a narrow range.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined annual PPI miss and weekly international investment flow data that showed offshore investors were large sellers of Japanese bonds.
• US tsys are sitting at session lows in Asia-Pac trade, with no obvious headline driver. This leaves cash tsys ~1bp cheaper across the major benchmarks.
• The cash JGB curve has bear steepened with yields flat to 3.2bp higher. The benchmark 10-year yield is flat at 0.584%, above BoJ's YCC old limit of 0.50% but below its new hard limit of 1.0%.
• The swaps curve has also bear steepened. Swap spreads are wider apart from the 40-year.
• Tomorrow is a public holiday in Japan.
• Later today, the US calendar sees CPI and Initial Jobless Claims data along with Fedspeak from SF Fed President Daly and Atlanta Fed President Bostic. There is also the latest 30-year supply.