Futures Pare Initial Bid On Core Global FI Weakness

JGB futures are off best levels, having edged lower after the Tokyo lunch break, tracking the move lower in global core FI markets, leaving JBZ2 +7 ticks at 148.68 last, operating around the middle of the range observed since Friday’s Tokyo close.

• Cash JGBs run 1.0bp cheaper to 2.0bp richer across the curve, with a bid observed in the super-long end during the afternoon, perhaps owing to 10-Year JGB yields hovering near the upper limit of the range permitted under the BoJ’s YCC framework and apparent diminished appetite when it comes to a challenge of the BoJ’s resolve (life insurers and pension funds may be active in the super-long end after 20+-Year paper registered/tested cycle cheaps at the back end of last week, while no immediate change in BoJ policy is foreseen).
• Tuesday will see PPI, the quarterly BSI survey and 5-Year JGB supply headline the domestic docket.