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ACGB Apr-27 Supply Goes Well

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Wider Backdrop Supports Futures Overnight

JGBS

JGB futures nudged a little higher in overnight dealing, with global core FI markets better bid on general recession and China COVID worry, although a late recovery from lows for U.S. equities saw the contract move away from its overnight peak, finishing +15.

  • Our technical analyst has noted that the primary downtrend in JGB futures remains intact, although the recent recovery has given bears pause for thought. Nonetheless, the trend breach of the 61.8% Fib for the 2015-2020 rally (149.65) continues to weigh on prices and indicates further losses towards the 3.0% lower Bollinger band and 10-DMA envelope (148.69/148.01), which marks both the 3.0% Lower Bollinger Band as well as the 1.0% 10-dma envelope. Resistance is at the Apr 1 high (150.14).
  • Early Tokyo cash JGB trade will likely see a degree of overnight catch up, although the fact that U.S. Tsy futures are marginally below late NY levels will likely limit any follow through in the futures contract, and may even apply very modest pressure.
  • Japan Exchange group data revealed that foreigners were net sellers of JGB futures for a 4th consecutive week in w/e May 6.
  • BoJ fixed rate operations and 1- to 10-Year Rinban purchases are due later today.
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JGB futures nudged a little higher in overnight dealing, with global core FI markets better bid on general recession and China COVID worry, although a late recovery from lows for U.S. equities saw the contract move away from its overnight peak, finishing +15.

  • Our technical analyst has noted that the primary downtrend in JGB futures remains intact, although the recent recovery has given bears pause for thought. Nonetheless, the trend breach of the 61.8% Fib for the 2015-2020 rally (149.65) continues to weigh on prices and indicates further losses towards the 3.0% lower Bollinger band and 10-DMA envelope (148.69/148.01), which marks both the 3.0% Lower Bollinger Band as well as the 1.0% 10-dma envelope. Resistance is at the Apr 1 high (150.14).
  • Early Tokyo cash JGB trade will likely see a degree of overnight catch up, although the fact that U.S. Tsy futures are marginally below late NY levels will likely limit any follow through in the futures contract, and may even apply very modest pressure.
  • Japan Exchange group data revealed that foreigners were net sellers of JGB futures for a 4th consecutive week in w/e May 6.
  • BoJ fixed rate operations and 1- to 10-Year Rinban purchases are due later today.