SCHATZ TECHS: (U5) Monitoring Resistance

JGB futures are cheaper, -17 compared to the settlement levels, but well above session lows.

• No. of condominium units supplied in Tokyo and surrounding areas fell 16.9% from a year earlier to units in May.
• “Japan's manufacturing activity expanded in June, crossing the 50 threshold, likely due to front-loading of output ahead of a scheduled increase in US tariffs next month.” (BBG)
• Cash US tsys are 1-2bps cheaper in today's Asia-Pac session as the markets digest the possible implications of a longer and more sustained US involvement in the Middle East conflict and how Iran might react to this, potentially blocking the Strait of Hormuz.
• Cash JGBs are flat to 2bps cheaper across benchmarks today, with the 20-year outperforming ahead of tomorrow’s supply. The benchmark 20-year yield is -0.4bps lower at 2.345%
• "Although 20-year bond issuance will be reduced by 1.8 trillion, the decline in yields from the peak in May suggests that it's already priced in. Meanwhile, Tokyo inflation is set to land on Friday after a hot Japan print last week." (per BBG)
• The swaps curve has bear-steepened, with rates 1-4bps higher. Swap spreads are mostly wider.
• Tomorrow, the local calendar will see Dept Sales data alongside 20-year supply.