Futures Richer With US Tsys

In post-Tokyo trade, JGB futures are stronger, closing +12 compared to settlement levels. This was influenced by a decline in yields for 2-through 10-year US Treasuries, as traders considered the possibility that Wednesday's CPI report might reveal further easing of US inflation in the previous month. According to economists surveyed by the WSJ, it is anticipated that the annual headline CPI rate for June will be 3.1%, down from the previous month's 4%. The narrower core gauge is also expected to ease to 5% year over year, compared to the previous reading of 5.3%.

• US tsys received a boost thanks to the New York Fed's survey on inflation expectations, which showed a decrease in the one-year outlook for inflation. In June, the outlook fell to 3.83% from the previous month's 4.07%, marking the third consecutive decline and reaching its lowest level since April 2021.
• Less hawkish headlines from Fed Daly, Mester and Barr further supported the downward movement in yields.
• The BOJ upgrades its assessment of the economy for three of nine regions in its quarterly regional report. The bank keeps unchanged its view for six regions. (See link ICYMI)
• Today on the data front we have June money stock figures, followed by June preliminary machine tool orders.
• The MoF plans to sell Y2.5tn 5-year JGBs.