A Pre-NFP Lull

Light macro-headline flow and the traditional pre-NFP Asia-Pac lull has made for limited U.S. Tsy trading, holding to a 0-02+ range holding true for T-Notes, last dealing +0-02 at 137-23, while cash Tsys are little changed along the curve.

• The JGB curve saw some light twist steepening, with super-long paper cheapening at the margin. Futures held a narrow range, last +1 vs. Thursday's settlement level. The latest round of BoJ Rinban ops saw the Bank leave the size of its 5-25 Year JGB purchases unchanged, with offer/cover ratios as follows: 5-10 Year 2.51x (prev. 2.44x), 10-25 Year 2.75x (prev. 4.17x). Broader focus continues to fall on the local fiscal dynamic, with the potential for further clarity surrounding the matter during the coming week.
• The Aussie bond curve continues to hold flatter, although it has been a fairly lacklustre end to week for the space. A slim weekly issuance slate from the AOFM, with the final week of 2020 set to see only one round of conventional ACGB supply, would have provided some light support. YM -0.5, XM +2.0. Swaps are generally wider vs. ACGBS across the curve.