A Calmer Asia Session

A much more sedate round of Asia-Pac trade for the global core FI markets on Tuesday, with an uptick/rally for most of the major regional equity indices applying light pressure to the U.S. Tsy space after some modest early richening. T-Notes last -0-02 at 132-04+, holding to a 0-06+ range, while the major cash Tsys run little changed to 1.0bp cheaper across the curve.

• The latest round of 5-Year JGB supply wasn't the firmest, at least on the pricing side, with the average price printing in line with broader expectations for the low price (per the BBG dealer poll). The cover ratio was a touch firmer than prev., while the price tail saw an incremental widening. The soft pricing of the auction and uptick in the domestic equity indices (TOPIX last +~3.0%) is applying some pressure to futures, which have pushed below their overnight/morning lows to last sit -17 on the day. 5-Year JGB yields haven't shown much of a reaction to the auction, with some modest underperformance in the belly of the curve seen (5- to 10-Year paper is ~0.5bp cheaper on the day).
• Aussie bonds moved in a similar manner to Tsys with a widening and elongation of Sydney's indoor mask-wearing order implemented as the latest COVID cluster grew providing the major headlines on the local front. Futures sit shy of best levels, with YM last printing +0.5 and XM -6.5 on the day.