National CPI Surprises On the Upside

In post-Tokyo trade, JGB futures are weaker, closing -9 compared to settlement levels.

• National CPI has just printed 2.2% y/y versus 1.9% est. and 2.6% prior. The Core and Core-Core measures also surprised on the high side, printing 2.0% y/y and 3.5% y/y respectively versus expectations of 1.9% and 3.3% and prior 2.3% and 3.7%.
• The data should pressure JGBs in the early rounds of Tokyo trading.
• Overnight, US tsys resumed their sell-off following a brief reprieve on Friday. US tsys finished the NY session with yields 2-4bps higher amid a flood of new corporate bonds and US tsy issuance. The 2- and 5-year tsy auctions both tailed.
• According to MNI’s technicals team, the trend direction in 10-year tsy futures remains down with the TYH4 contract trading close to its recent lows. Price has pierced 109-17, 50.0% of the Oct - Dec bull cycle. A clear break of this retracement would strengthen the bearish condition and signal scope for an extension towards 108-19+, the 61.8% Fibonacci level.
• Looking ahead the US calendar sees Durable Goods Orders, FHFA House Price Index, Conf. Board Consumer Confidence & Richmond Fed Manufact. Index out later today.
• Today, the local calendar will see the MoF sell 5-Year Climate Transition Bonds.