A Mixed Bag In Asia

Commentary from Boston Fed President Rosengren failed to add much in the way of tangible new information during Asia-Pac hours, with T-Notes sticking to the confines of a 0-03+ range, last unchanged at 132-17+. Regional participants were happy to sell cash Tsys at the re-open (in what was the first round of cash trade during Asia-Pac hours for the week), with the longer end of the curve running ~1.5bp cheaper on the day, albeit back from softest levels of the day. Activity was headlined by a 20K screen lift of the TYM1 130.00 puts.

• JGBs benefitted from the richening in play in U.S. Tsys since Friday's Tokyo close as participants returned from their elongated weekend. The presence of the latest round of BoJ Rinban operations (covering 5- to 25-Year paper) and seemingly impending extension of the state of emergency in Tokyo (and perhaps some of the other areas under their own such declarations) added to the bid. Still, the uptick in local equities seemed to cap the rally, with futures now only 5 ticks higher on the day.
• Aussie bonds stuck to a narrow range, failing to really kick on in early trade, even with short, snap COVID restrictions coming into play in the greater Sydney area (on the back of a couple of COVID cases being found in the last 48 hours). Later in the day we saw headlines note that China's NDRC has halted activities under the China-Australia economic dialogue indefinitely. Still, some local participants and some experts in the field have equated the impact of the cessation of the discussions to 0, with the AUD unwinding some of its knee-jerk move lower, and ACGBs limited in their reaction to the news. YM +0.5 & XM +4.0 on the day at typing.