A Mixed Bag To Start The Week

Core FI markets are seemingly happy to settle into the ranges established during early Asia-Pac hours, with little in the way of tier 1 headline flow evident thus far, leaving the previously flagged U.S. fiscal and oil-market developments that became apparent over the weekend in the driving seat.

• T-Notes -0-09 at 132-02 at typing, while the belly underperforms in cash trade, with 7s sitting ~2.0bp cheaper on the day, although the space is off intraday cheaps as e-minis trade back from best levels.
• JGB futures run 29 ticks softer vs. settlement, with the global impulse evident since Friday's Tokyo close outweighing any lagged impact from BoJ Governor's Kuroda's Friday address. The belly once again proves to be the laggard here, suggesting the move may be futures driven, with 7s running ~2.0bp cheaper on the day, while super-long swap spreads have widened by ~2bp.
• Aussie bonds are the outperformers, even with the RBA refraining from conducting 3-Year yield target enforcing operations (see earlier bullets for details), with some pointing to an article from the AFR's RBA watcher Kehoe (which focused on the Bank's view on NAIRU and need to see actual not expected developments in the labour market and inflation) as a driving factor there. YM +2.0, XM +5.0, with the Aussie/U.S. 10-Year yield spread tightening back below 20bp early this week.