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Futures Weaker Overnight, US Tsys Under Pressure From Stronger Consumer Confidence

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In post-Tokyo trade, JGB futures are sharply weaker, closing -17 compared to settlement levels, after US tsys were pressured by stronger-than-expected Conference Board Consumer Confidence (despite a weak labour differential) and then sizeable tails for 2Y and 5Y auctions. The bid-to-cover metrics were the lowest since Nov’21 and Feb’21 respectively.

  • Fed Kashkari (non-voter) said he doesn’t think anyone has taken rate increases off the table, although he sees the odds of a hike as quite low.
  • The curve steepened with yields 3-9bps higher. The US 10Y yield easily cleared 4.50% to finish at 4.55%, the highest since the May 3 payrolls report.
  • The markets now await Friday's US PCE inflation details for more direction.
  • On the local data front today, Consumer Confidence for May out later. Before that BoJ Board member Adachi speaks in Kumamoto at 10:30 am local time.
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In post-Tokyo trade, JGB futures are sharply weaker, closing -17 compared to settlement levels, after US tsys were pressured by stronger-than-expected Conference Board Consumer Confidence (despite a weak labour differential) and then sizeable tails for 2Y and 5Y auctions. The bid-to-cover metrics were the lowest since Nov’21 and Feb’21 respectively.

  • Fed Kashkari (non-voter) said he doesn’t think anyone has taken rate increases off the table, although he sees the odds of a hike as quite low.
  • The curve steepened with yields 3-9bps higher. The US 10Y yield easily cleared 4.50% to finish at 4.55%, the highest since the May 3 payrolls report.
  • The markets now await Friday's US PCE inflation details for more direction.
  • On the local data front today, Consumer Confidence for May out later. Before that BoJ Board member Adachi speaks in Kumamoto at 10:30 am local time.