Futures Hovering Near Session Cheaps, 20Y Supply Tomorrow

JGB futures are weaker and hovering near session lows, -19 compared to the settlement levels.

• Outside of the previously outlined Machina Orders, there hasn't been much in the way of domestic drivers to flag.
• (MNI, ICYMI) The BoJ will be watching to see whether the US manages to avoid a steep economic slowdown, former BoJ chief economist Toshitaka Sekine told MNI. “The BoJ is unlikely to raise its policy interest rate amid low visibility and volatile markets. I don’t think the low visibility will disperse by the September and October policy-setting meetings,” he said.
• Sekine, who correctly anticipated the BoJ’s July hike in its short-term rate target to 0.25%, said there was a danger it could fall behind the curve if it leaves real interest rates below equilibrium levels for too long, feeding inflation and other economic distortions.
• Cash US tsys are slightly mixed, with a flattening bias, in today’s Asia-Pac session.
• Attention now turns to the Jackson Hole economic symposium, which will be held Aug. 22-24. Fed Chairman Powell speaks at 1000ET Friday morning.
• Cash JGBs are 2-5bps cheaper across benchmarks, with the 20-year underperforming ahead of tomorrow’s supply.
• The swaps curve has bear-steepened, with rates 1-5bps higher. Swap spreads are mixed.
• Tomorrow, the local calendar will see Tokyo Condominiums for Sale data.