Futures Uptick Overnight, PPI Data Due

In post-Tokyo trade, JGB futures upticked, closing +1 compared to settlement levels, after US tsys finished stronger ahead of today’s US CPI data and FOMC Minutes. (See MNI U.S. CPI Preview: Apr 2024 - Key Framing Of Trends With June Cut Seen As A Coin Toss here)

• US yields finished 4-7bps lower, with the 2-year sliding 5bps to 4.74% and the 10-year dropping 6bps to 4.36%.
• In economic news, the NFIB survey of US small businesses showed optimism fell to 88.5, the lowest level in more than 11 years, after falling for seven of the past eight months.
• (Bloomberg Economics) -- A significant consequence of the BoJ's recent rate hike is that it now has to pay interest on a mountain of reserves that’s almost as big as Japan’s GDP. This could lead to operating losses, as the Federal Reserve and European Central Bank have experienced in winding down their unconventional policies. Will concerns about mounting interest expenses stand in the way of more BOJ rate hikes? We don’t think so. (See link)
• Today, the local calendar will see PPI and Bank Lending data. The PPI is projected to be marginally firmer at 0.8% y/y, versus 0.6% prior.