Futures Slightly Higher Overnight Despite Higher US Yields

In post-Tokyo trade, JGB futures are slightly higher, closing +7 compared to settlement levels, despite US tsy yields pushing higher as risk appetite returned to the market. The cash tsy curve bear-steepened, with yields 5-11bps higher. The US 2-year briefly traded back above 4%, before closing +5.5bps at 3.98%. The US 10-year closed +10bps at 3.89%.

• According to MNI’s technicals team, Monday's gains in the US 10-year futures contract reinforced the current bullish condition. Note that MA studies are in a bull-mode position too and the recent breach of 111-01, Jun 14 high, confirmed a resumption of the uptrend.
• Today, the US calendar will see MBA Mortgage Apps and Consumer Credit data. Boston Fed Collins is set to speak but is not expected to discuss policy. There is also a $42bn US tsy 10-year note auction.
• (Bloomberg Economics) The yen carry trade appears to be unwinding at the fastest pace since the currency surged in 2007 after the onset of the subprime mortgage crisis. We’ve been alert to the risk of a sharp reversal in the currency’s fortunes since March – and now it’s materialising. (See link)
• Today, the local calendar will see Leading and Coincident Indices alongside BoJ Rinban Operations covering 1-5-year and 10-25-year JGBs.