Futures Stronger Overnight, US Tsy Yields Move Away From YTD Highs, US 20Y Supply Well Received

In post-Tokyo trade, JGB futures are stronger, closing +18 compared to settlement levels, after US tsys moved away from YTD yield highs. There was a modest risk-off tone to markets overnight, with US tsy yields lower, credit spreads wider, US equities weaker and oil prices weaker. Technical buying, bargain hunting and an especially well-received 20-year auction also helped US tsys.

• There was limited economic data, but US mortgage applications rose despite higher rates - seasonally adjusted 3.3% last week after a flag week prior.
• Fed Beige Book: overall economic activity expanded slightly on balance since late February. Ten out of twelve Districts experienced either slight or modest economic growth from eight in the previous report, while the other two reported no changes in activity.
• Today’s US calendar will see Weekly Claims, Existing Home Sales and Fed Speak from Bowman, Williams, Bostic and Collins.
• Elsewhere, UK Headline and Core CPI inflation fell to 3.2% y/y and 4.2% y/y respectively, although both figures were a tick higher than expected.
• Today, the local calendar sees weekly International Investment Flow, Tertiary Industry Index, Tokyo Condominiums for Sale and Machine Tool Orders data alongside 1-year supply. The MoF will also conduct an Enhanced-Liquidity Auction for 15.5-39-year OTR JGBS.