Futures Slightly Stronger At Lunch, Off Tokyo Session Bests

JGB futures are higher at the lunch break, +9 compared to Tuesday settlement levels, but sit near Tokyo session lows.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined BoJ Minutes for the March meeting.
• US tsys are 1bp cheaper to 1bp richer across major benchmarks with the 2/10 curve twist flattening in Asia-Pac trade.
• Despite early strength, JBM3 currently sits at 148.61, sandwiched between the April trading range's top at 147.92 and the March 22 high at 149.53. Technical analysis from MNI suggests that breaking the March 22 high would signal the continuation of the uptrend. To the downside, the 50-dma provides support at 147.68, just above the April 18 low.
• Cash JGBs yields are flat to 0.9bp higher across the curve after Tokyo’s morning session apart from the 10-year zone, which sees its yield 0.1bp lower at 0.42%.
• A Bloomberg survey of market forecasts expects the 2/10 cash curve to steepen to 55bp by end-Q2 versus 46bp currently.
• Swaps are mixed with rates -0.3bp to +0.3%. Swap spreads are tighter except for the 2-year zone.