Futures Slightly Cheaper As US Tsy Yields See Highest Levels Since 2007

In post-Tokyo trade, JGB futures are slightly weaker, closing -5 compared to settlement levels, after US tsys finished dealing 3-6bps cheaper across the major benchmarks, with the belly underperforming. Hotter-than-anticipated inflation data in Canada for the second straight month and rising oil prices added to global concerns about resurgent price pressures.

• In the second half of the NY session, yields made new highs with traders apparently nervous ahead of FOMC tonight, with fears around revised projections and dot plots which currently imply 100bps of easing in 2024. Algo selling was also evident across the tsy curve.
• The $13bn 20-year re-opening met with solid demand but didn't provide much relief. US tsys closed just off yield highs. The 10-year yield printed its highest level since November 2007 before marginally paring gains.
• Bloomberg reports that investors keeping an eye on Bank of Japan policy have shifted their attention to the possible end of the central bank’s negative interest rate following the loosening of guide rails around bond yields. (See link)
• Today the local calendar sees August Trade Balance and Tokyo Condominiums for Sale data, along with BoJ Rinban operations covering 1- to 25-year JGBs.