JGBS: 7Y Leads Market Cheaper, Record High For 40YY

At the Tokyo lunch break, JGB futures are weaker, -37 compared to settlement levels, but sitting above overnight closing levels.

• March household spending data was much better than forecast, offsetting some of the negative impact of the lower labor earnings data. Real household spending rose 2.1%y/y, versus 0.2% forecast and -0.5% prior. In the month household spending rose 0.4%.
• Cash US tsys are ~1bp richer in today’s Asia-Pac session after yesterday’s heavy session. Fed speakers will return from the media blackout on Friday: Barr, Kugler, Williams, Barkin, Waller, Hammack, and Cook are expected.
• Cash JGBs are flat to 4bps cheaper across benchmarks, with the futures-linked 7-year leading the way. The benchmark 10-year yield is 3.4bps higher at 1.368% after yesterday’s poor auction.
• The 40-year yield climbed to its highest level, 3.374%, on record today amid heightened volatility from the global trade war and concerns about worsening supply and demand for super-long debt.
• Swap rates are slightly mixed, with movement bounded by +/- 1bp. Swap spreads are mostly tighter.