Futures Uptick At Lunch, Awaits Gov. Ueda’s Appearance In Parliament

JGB futures sit slightly firmer at the lunch break, +9 compared to settlement levels.

• With a light domestic data calendar and a lack of supply-side drivers (JGB auctions and BoJ bond purchase operations), local participants are likely on headline watch ahead of US CPI later today.
• To that end, BoJ Governor Ueda is scheduled to appear in Parliament from 0500 BST / 1300 JST.
• Leading and Coincident Indicators for March (preliminary) are due for release later in day.
• At 148.55, JBM3 is still positioned within a range of 147.92 (the upper limit of April's trading range) and 149.53 (the high point of March 22). According to MNI's technical analyst, if JBM3 surpasses the March 22 high, it would signal a continuation of the upward trend. On the other hand, the 50-day moving average serves as support at 147.31, positioned slightly above the low point of April 18.
• Cash JGBs are richer across the curve, except in the 1-year zone which is 0.9bp cheaper. Yields are flat to 1.2bp lower with the cash curve flatter. The benchmark 10-year yield is 0.6bp lower at 0.42%, below the BoJ's YCC limit of 0.50%.
• The swaps curve bull flattens with swap spreads tighter out to the 10-year zone and wider beyond.