Futures Near Cheaps, Cash US Tsys Weigh, National CPI Tomorrow

JGB futures are weaker, -17 compared to settlement levels, but above cheaps seen early in the Tokyo afternoon session.

• Outside of the previously outlined international investment flow data, there hasn't been much in the way of domestic data drivers to flag.
• Today's supply of 5-year bonds showed solid results, with the auction's low price meeting dealer expectations, the cover ratio rising and the auction tail shortening.
• Any positive impetus from today's supply, however, was countered by cash US tsys, which are 2-3bps cheaper in today’s Asia-Pac session.
• Today, the US calendar will see Weekly Claims, House Starts and Building Permits. The Bank of England will also make their policy announcement, with an on-hold decision likely.
• The cash JGB curve has twist-flattened, pivoting at the 40s, with yield movements bounded by +/- 2bps. The benchmark 10-year yield is 1.7bp higher at 0.949% versus the cycle high of 1.101%. The 5-year yield is 0.7bp higher at 0.517% after today’s supply.
• Swap rates are flat to 2bps higher out to the 30-year and 6bps higher beyond. Swap spreads are tighter out to the 10-year zone and wider beyond.
• Tomorrow, the local calendar will see National CPI and Jibun Bank PMIs (Preliminary).