A Mixed Bag

A light downtick in e-minis resulted in some modest support for core FI markets as we moved through the final Asia-Pac session of the week, although there was little in the way of notable headline flow, with the moves only marginal, at best.

• T-Notes clung to a tight range, last +0-01 at 139-05, with yields sitting 0.3-0.8bp richer across the cash Tsy curve. Flows were eyed, with some focus on the downside, with some light screen interest in 1x2 TYZ0 137.00/135.00. Eurodollar futures sit unchanged to 0.5 tick higher through the reds. Here, a combination of block and screen sales in EDM1 and on screen steepener flow in EDU2/U4 received attention, especially given the lack of headline flow that was evident overnight.
• JGB futures sagged during the morning, after the pullback from overnight highs continued, before the defensive feel in the Nikkei 225 and e-minis crept in, allowing JGB futures to bottom, at least for now. Contract last +4, with the super-long end outperforming in cash, while 10s represent the weak point on the curve.
• Spill over from yesterday's RBA commentary, in addition to a stellar ACGB auction and Westpac expressing greater conviction re: imminent RBA easing, supported the Aussie bond space. YM +0.5, XM +1.5.