ACGB Curve Absorbs Impetus From U.S. Tsys, Debt Supply Eyed

The dust has settled after the release of U.S. inflation figures this week, while early Asia-Pac trade has seen little in the way of notable headline flow. T-Notes are rangebound and last trade +0-02 at 133-16+ at typing. Cash Tsy yields sit in close proximity to neutral levels after 10-Year yield printed a fresh one-month high Thursday, in the wake of an underwhelming 30-Year auction. Eurodollar futures last seen unch. to +0.5 tick through the reds. The latest University of Michigan survey headlines the U.S. docket today, in what looks set to be a quiet end to the week.

• Japan's MoF will hold a liquidity enhancement auction for off-the-run JGBs with 5-15.5 Years until maturity, but the market impact should be limited. JGB futures reopened on a slightly softer footing, following overnight weakness in U.S. Tsys. The contract last changes hands at 152.17, 3 ticks below Thursday's settlement. Cash JGB yields are marginally mixed across the curve.
• The AOFM is set to auction A$1.2bn of 4.75% 21 Apr '27 Bond at the top of the hour, before releasing the new weekly issuance schedule. YM trades -1.0 & XM -3.0, both stick to narrow ranges. Cash ACGB space has absorbed impetus from overnight moves in U.S. Tsys and bear steepened at the margin, with yields last seen 0.5-3.5bp higher. Bills trade unch. to -1 tick through the reds. The local coronavirus situation is set to continue to grab attention, after the detection of a positive case yesterday pushed ACT into lockdown.