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Futures Little Changed in Overnight Trade, US Tsys Cheaper

JGBS

In post-Tokyo trade, JGB futures are little changed, closing -2 compared to settlement levels, after US tsys finished 2-5bp cheaper across the major benchmarks. The curve bear steepened. A brisk pace of corporate issuance and firmer oil prices saw US tsys pressured. Debt chatter also persisted, with House Speaker McCarthy seemingly contradicting President Biden's positive assessments.

  • Atlanta Fed President Bostic noted he favoured keeping rates on hold but the next move is more likely to be up rather than down due to inflation pressures. Minneapolis Fed President Kashkari reiterated comments seen previously that inflation is too high and the labour market remains strong.
  • At 148.68, JBM3 remains positioned within a range of 147.92 (the upper limit of April's trading range) and 149.53 (the high point of March 22).
  • The local data calendar is quiet today. Late yesterday the MNI policy team noted that the BoJ may upgrade the inflation outlook, but this is unlikely to lead to any policy tweaks in the near term (see this link, https://marketnews.com/mni-policy-boj-to-upgrade-cpi-outlook-but-no-tweak-imminent).
  • Today will see BoJ Rinban operations covering 1-10-year and 25-Year+ JGBs.

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