Futures Turn Negative, Curve Twist Flattens

JGB futures are -7 at the lunch break, more than reversing the modest overnight increase that had pushed prices to a high of 147.55. Currently, futures are sitting at 147.37, which puts them back below the range of 147.40-147.92, where they have generally traded since early April. Yesterday, during early trading hours in Tokyo, JGB futures briefly dropped below the bottom of the range, hitting a low of 147.27, before making a recovery. According to MNI's technical analyst, if prices break below yesterday's low, it may indicate a deeper retracement to 145.80, the March 13 low.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined Reuters Tankan survey for April.
• Cash JGBs are mixed with yields out to the 10-year 0.3bp richer to 0.5bp cheaper and beyond 1.2-1.4bp richer, with the curve twist flattening. The benchmark 10-year yield is 0.5bp higher at 0.477%, below the BoJ's YCC limit of 0.50%.
• Swap spreads are wider across the curve, with the swap curve twist flattening.