Futures Richer, US Tsy Yields Lower After UK CPI Miss

In post-Tokyo trade, JGB futures are stronger, closing +8 compared to settlement levels, after US tsys richened following weaker than expected UK CPI data. The 2-year tsy yield reached a low of 4.69% before bouncing back. Meanwhile, 10-year tsy yields outperformed, leading to a flattening and inversion of the 2/10s curve back to -100 basis points. The only noteworthy US data was the June housing starts and building permits, which both fell short of consensus forecasts.

• A Blomberg survey of economists has seen the timing of a policy shift pushed back to October. 82% of economists surveyed see no change in July, with 18% expecting a shift. This is down from around a third expecting a shift in July when the last poll was conducted in June. The shift in perceptions comes as Governor Kazuo Ueda continues to make the case for sticking with monetary stimulus. Ueda said Tuesday that the BOJ will retain its easing stance as long as officials believe the bank is still some ways away from achieving its inflation target on a sustained basis. (See link)
• Today the local calendar sees June data for the Trade Balance, Tokyo Condos For Sale and Machine Tool Orders (Final), ahead of the release of National CPI data on Friday.
• Today will also see BoJ Rinban operations covering 1- to 25-Year JGBs.