Futures Richer & At Tokyo Session Highs At Lunch Break, Results Of Rinban Operations Due

At the Tokyo lunch break, JGB futures are richer and at a Tokyo session high of 145.18, +41 compared to settlement levels, after yesterday’s holiday.

• According to MNI’s technicals team, clearance of 146.41, the Sep 4 high, would signal a base and a possible short-term reversal.
• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined August current account and trade balance data. Later today sees the release of the September Eco Watchers Survey.
• US Tsys are holding close to session lows, however, there has been little follow-through on the initial move lower as of yet. There has been little in the way of meaningful macro news flow. Cash US Tsys sit 13-15bps richer across the major benchmarks.
• The cash JGB curve has twist-flattened. The benchmark 10-year yield is 3.4bps lower at 0.771%, above BOJ's YCC soft limit of 0.50% but below its hard limit of 1.0%. It is also lower than the cycle high of 0.814%, set late last week.
• The swaps curve has bull-flattened, with rates 0.9bp to 5.5bps lower. Swap spreads are tighter across all maturities.
• Results of the BOJ’s Rinban operations covering 1-3-year and 5-25+-year JGBs are due at 0400 BST / 1200 JST.