Futures Slightly Weaker After US Tsys Find Some Stability

In post-Tokyo trade, JGB futures are slightly weaker, closing -4 compared to settlement levels, after US tsys finished Thursday with small movements and a modestly steeper curve led by a retracement in the 2-year yield. The US 10-year found support with yields just under 4.6%, 4bps higher.

• There was fast two-way trade around the ECB's steady rate announcement and largely in-line US PPI data. PPI inflation missed at 0.15% m/m (0.3% est) in March, but core measures were in line.
• Initial claims were lower than expected at a seasonally adjusted 211k (cons 215k) after a marginally upward revised 222k (initial 221k).
• US tsys dipped briefly after $22bn 30Y auction re-open tailed for the first time in 5 auctions (5.2bp tail in Nov'23): 4.671% high yield vs. 4.662% WI; 2.37x bid-to-cover vs. 2.47x in the prior month.
• Fed Collins and Fed Williams said it may take more time to gain the confidence to begin easing policy. Williams: “There’s no clear need to adjust monetary policy in the very near term”.
• The ECB’s in-line policy update had little lasting impact, with ECB Lagarde indicating that the Federal Reserve would not influence her, saying inflation conditions in Europe were different from the US.
• Today, the local calendar sees Industrial Production and Capacity Utilisation data alongside BoJ Rinban operations covering 1- to 10-year JGBs.