Futures Little Changed in Post-Tokyo Trade, Awaits US CPI

JGB futures are virtually unchanged in post-Tokyo trade, closing -2 compared to settlement levels. US tsys finished 1-2bp cheaper across major benchmarks in NY trade, extending their recent sell-off. Cash tsys pared early session losses after surprisingly strong demand shown at the 3-year auction, which delivered the highest cover ratio since March 2018. The latest talks on the US debt ceiling did not produce any movement.

• According to MNI's technical analyst, JGB futures have confirmed an extension of the current short-term bull cycle. The strong recovery from 147.27, the April 18 low, confirms the corrective nature of the pullback between March 22 and April 18. Attention remains on 149.53, the March 22 high and the bull trigger. A break of this level would confirm a resumption of the uptrend.
• Yesterday’s weaker-than-expected prints in inflation-adjusted pay and household spending in March showed conditions for the BoJ to achieve its 2% inflation target in a stable and sustainable way may still be some way off.
• The local calendar is light today with Leading and Coincident Indicators for March (preliminary) as the highlights. US CPI (Apr) is the global calendar’s highlight today.