Futures Look Through Overnight Bests Before Bid Fades

JGB futures consolidate their overnight gain, last printing +19, after retracing from an early Tokyo spike through their overnight session high. Meanwhile, cash JGBs play catch up and run 0.5-2.5bp richer, with 10s leading the bid. The swaps curve has come under some light flattening pressure, although swap spreads are generally incrementally wider on the day,

• Final services & composite PMI data lodged slightly faster rates of expansion vs. flash levels, but won’t move the needle for JGBs.
• Focus is on the impending BoJ Rinban operations covering 1- to 5- & 10- to 25-Year paper (the first Rinban since the well-documented tweak to the purchase bands in the Q2 outline). Namely, investors are keen to see if the BoJ will reduce the purchase sizes in the 10- to 25-Year zone.