A Bit Of A Weekend Hangover For Core FI

The fresh all-time high for e-minis managed to apply light pressure to the U.S. Tsy space in overnight trade, with T-Notes last -0-01 at 139-02, while yields deal 0.4-0.8bp cheaper across the curve at typing. Weekend news flow was generally negative, but there was little in the way of fresh sources of risk, and none of the risks identified over the weekend were deemed to have reached a critical juncture.

• JGB futures gave back most of their overnight rally at the Tokyo re-open, before seeing a modest uptick in the afternoon, last +12 vs. settlement levels. 7s outperformed in cash trade. Swap spreads were wider across the curve, as the swap curve steepened. 1-5 Year BoJ Rinban ops saw the sizes of the ops left unchanged, with the most notable detail in the breakdown being an uptick in offer/cover of the 1-3 Year ops (to a not so lofty 3.00x). Elsewhere, Japanese Chief Cabinet Secretary Suga refused to comment on any prospects re: running for PM, using his latest address to focus on the task at hand i.e. fighting COVID-19. This came after press reports pointed to him gaining favourability amongst LDP factions.
• Aussie bond futures generally held the flattening bias witnessed in SYCOM hours, with some clear interest to enter long XM positions evident (after the contract ran above 1.00% in implied yield terms on Friday). Elsewhere, the latest round of ACGB '30 supply was well received, while TCV launched a new Sep '31 benchmark bond, CBA took IOIs on subordinated 10NC5 FRN and/or fixed and Qantas launched 10-Year paper (and will buy '21 paper back as part of the issuance). YM -0.5, XM +4.5.