JGBS: Futures Stronger & Near Session Highs At Lunch

At the Tokyo lunch break, JGB futures are stronger and near session highs, +40 compared to the settlement levels.

• According to MNI’s technicals team, the sharp rally in JGB futures in early August confirmed a bullish reversal and in the process cleared several important resistance points. A continuation higher would pave the way for a climb towards 147.74, the Jan 15 high and a bull trigger. Any exhaustion of this bullish move would see momentum shift lower, initially targeting 143.57, the Jul 17 high. A move lower would likely be a correction.
• The Japanese government works closely with the Bank of Japan on economic and fiscal management, Chief Cabinet Secretary Yoshimasa Hayashi says in a regular briefing in Tokyo. (as per BBG)
• Jibun Bank PMIs for August print: the Services Index is unchanged at 53.7 from July, and the Composite Index rises to 52.9 from 52.5 in July.
• Cash US tsys are little changed in today’s Asia-Pac session after yesterday’s solid risk-off-induced gains.
• Cash JGBs are 1-4bps richer across benchmarks, with the futures-linked 7-year leading. The benchmark 10-year yield is 2.6bps lower at 0.900% versus the cycle high of 1.108%.
• Swap rates are 1-2bps lower out to the 30-year and slightly higher beyond. Swap spreads are mixed.