Futures Pare Gains At Lunch Ahead Of 30-Year Supply

JGB futures pare gains at the lunch break, +6 versus settlement levels, ahead of today’s auction of 30-year JGBs. In contrast, US tsys are trading stronger in Asia-Pac trade with cash 10-year yields 2bp lower.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined of the BoJ Summary of Opinions for the April meeting. The weaker-than-expected trade numbers didn’t appear to provide any meaningful bid in the market.
• The cash JGB curve twist flattens with yields 0.6bp higher to 1.6bp lower. The benchmark 10-year yield is 1.1bp lower at 0.414%, below the BoJ's YCC limit of 0.50%, while the 30-year moves off session bests to be down 0.6bp. In early Tokyo trade the 30-year was down as much as 1.4bp.
• Swap rates are lower out to the 20-year zone and slightly higher beyond. In morning trade, the entire swap curve had seen lower rates. Swap spreads wider, other than for the 1-year zone.