Free Trial

Futures Sitting Weaker, Near Cheaps After PPI Beat

JGBS

JGB futures sit near Tokyo session cheaps in afternoon trading, -24 versus settlement levels.

  • Higher-than-expected April PPI, which came ahead of monthly CPI data later in the week, appears to have assisted today’s relatively weak performance.
  • 5-year supply saw relatively smooth digestion with the low price coming in line with dealer expectations, although the cover ratio did decline, and the tail increased since last month's auction.
  • Cash JGBs are 0.3-1.2bp weaker across the curve, except for the 2-year zone, with the curve steeper. The benchmark 10-year yield is 1.2bp higher at 0.402%, below the BoJ's YCC limit of 0.50%. The 5-year benchmark is 0.4bp cheaper at 0.111%, little changed from levels prevailing before the JGB supply.
  • The swap curve bear steepens with swap spreads wider outside of the 1-year zone.
  • The local calendar is light tomorrow ahead of Q1 GDP (preliminary) on Wednesday and National CPI on Friday.
  • BoJ Rinban operations covering 1-10-year and 25-Year+ JGBs are scheduled for tomorrow ahead of 20-year JGB supply on Wednesday.
  • Further afield, the global calendar is light ahead of tomorrow’s data dump in China, the Euro Area's Q1 GDP and US Retail Sales.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.