Core FI Gain Amid Risk Aversion

Risk sentiment has soured again, with U.S. e-min futures in the red. A familiar combination of risks continues to spoil the global growth outlook. Antipodean markets re-open after a long weekend.

• T-Notes trades +0-05 at 119-24+ as demand for the contract returns after abating in late NY hours. Eurodollar futures run 1.5-3.5 ticks higher through the reds. The yield curve has steepened a tad in cash Tokyo trade, with yields last seen 1.6-3.0bp lower. Looking ahead, durable goods orders, Conf. Board Consumer Confidence & new home sales provide local data highlights on Tuesday, with 2-Year Tsy auction also up today.
• JGB futures have started on a firmer footing and now operate at 149.40, up 13 ticks versus the last settlement. Cash JGB yields generally sit lower, with the super-long end of the curve leading gains. Japan's unemployment rate unexpectedly slipped to 2.6% in March from 2.7% prior, but the data is unlikely to move the needle on the BoJ's meeting, with the policy announcement due Thursday. In the meantime, the BoJ will conduct unlimited fixed-rate bond purchases (the last in a four-day series) in addition to a regular round of Rinban operations.
• Aussie bond futures have rebounded after the initial light sell-off and YM now deals +11.0, with XM +7.5. Bills trade unch. to +14 ticks through the reds. Cash ACGBs have caught a bid as Sydney trading re-opened after the ANZAC Day, with yields last seen 6.8bp-10.7bp lower; the curve has steepened as the short-end leads gains. There is little of note on the local docket today, which shifts focus to Australia's quarterly CPI report, due for release on Wednesday.