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Futures Little Changed Overnight, Plenty To Weigh Up At Tokyo Re-open

JGBS

JGB futures recovered from worst levels of post-Tokyo trade during last week’s final session of overnight dealing, finishing -1 vs. Tokyo settlement, although some modest early weakness in U.S. Tsys this week, coupled with reaction to Friday’s bear steepening of the U.S. curve, may provide some pressure.

  • Conversely, Friday’s JGB trade saw the curve bull flatten, with some flagging potential re: lifers deploying capital in the super long end.
  • Note that the weekend saw Nikkei sources report that the Japanese government will use deficit-financing bonds to cover Y2.7tn of extra spending under a supplementary budget, as it looks to shield consumers and businesses from the well-documented global inflationary pressures. The article suggested that the government plans to formally decide on the spending decision on Monday, with a view to the stimulus being passed in the current parliamentary session.
  • PPI & machine tool orders headline the domestic data docket on Monday, with 10-Year JGBi due on the supply side.
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JGB futures recovered from worst levels of post-Tokyo trade during last week’s final session of overnight dealing, finishing -1 vs. Tokyo settlement, although some modest early weakness in U.S. Tsys this week, coupled with reaction to Friday’s bear steepening of the U.S. curve, may provide some pressure.

  • Conversely, Friday’s JGB trade saw the curve bull flatten, with some flagging potential re: lifers deploying capital in the super long end.
  • Note that the weekend saw Nikkei sources report that the Japanese government will use deficit-financing bonds to cover Y2.7tn of extra spending under a supplementary budget, as it looks to shield consumers and businesses from the well-documented global inflationary pressures. The article suggested that the government plans to formally decide on the spending decision on Monday, with a view to the stimulus being passed in the current parliamentary session.
  • PPI & machine tool orders headline the domestic data docket on Monday, with 10-Year JGBi due on the supply side.