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Futures Weaker At Lunch, Mid-Range, Liquidity Enhancement Auction for 5-15.5-Year

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At the Tokyo lunch break, JGB futures are weaker, -6 compared to the settlement levels, and sit in the middle of the day’s range.

  • Outside of the previously outlined National CPI, there hasn't been much in the way of domestic drivers to flag. Department Sales data later along with a Liquidity Enhancement Auction for OTR 5-15.5-year JGBs.
  • (Dow Jones) Japan's consumer inflation grew at a slower pace in April, but remained above the Bank of Japan's 2% target amid growing expectations over additional interest-rate increases. (See link)
  • According to MNI’s technicals team, a bear trend in JGB futures persists, erasing the corrective bounce last week. The contract is for now trading just above key support and bear trigger at 143.44, the Nov 1 low. A stronger reversal higher is required to signal the end of the recent downward phase. Key resistance is at 145.95, the Mar 28 high. A break would signal scope for a climb towards the bull trigger at 147.74, the mid-January high.
  • Cash US tsys are dealing 1bp richer in today’s Asia-Pac session after yesterday’s sell-off.
  • Cash JGBs are little changed. The benchmark 10-year yield is 0.2bp higher at 1.004% versus the YTD high of 1.011%.
  • The swaps curve has slightly bull-flattened, with rates flat to 2bps lower. Swap spreads are mostly tighter.
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At the Tokyo lunch break, JGB futures are weaker, -6 compared to the settlement levels, and sit in the middle of the day’s range.

  • Outside of the previously outlined National CPI, there hasn't been much in the way of domestic drivers to flag. Department Sales data later along with a Liquidity Enhancement Auction for OTR 5-15.5-year JGBs.
  • (Dow Jones) Japan's consumer inflation grew at a slower pace in April, but remained above the Bank of Japan's 2% target amid growing expectations over additional interest-rate increases. (See link)
  • According to MNI’s technicals team, a bear trend in JGB futures persists, erasing the corrective bounce last week. The contract is for now trading just above key support and bear trigger at 143.44, the Nov 1 low. A stronger reversal higher is required to signal the end of the recent downward phase. Key resistance is at 145.95, the Mar 28 high. A break would signal scope for a climb towards the bull trigger at 147.74, the mid-January high.
  • Cash US tsys are dealing 1bp richer in today’s Asia-Pac session after yesterday’s sell-off.
  • Cash JGBs are little changed. The benchmark 10-year yield is 0.2bp higher at 1.004% versus the YTD high of 1.011%.
  • The swaps curve has slightly bull-flattened, with rates flat to 2bps lower. Swap spreads are mostly tighter.