ACGBs Firm On Soft CPI, JGB Traders Look To BoJ Rinban Schedule

T-Notes corrected from overnight lows as Aussie bonds moved higher, printing fresh session highs on the move, before moving back from best levels. The contract last trades -0-01 at 132-00, in the middle of a 0-05 range. Cash Tsy trade has seen some light twist steepening of the curve. Macro headline flow was light, with continued speculation surrounding the tax side of U.S. President Biden's fiscal plan. On the flow side we saw 10.0K of the TYM1 133.50 calls lifted at 0-09 via a block trade (we saw a 10.0K block buy of the same option at 0-24 ahead of European hours on 21 April). There was also a 2,350 block seller of UXYM1 futures.

• JGB added to overnight losses, last -10. Cash trade saw yields little changed to a touch higher across the curve, given the move in futures since yesterday's close. A well-received round of 2-Year JGB supply saw the tail narrow when compared to the previous auction, with the cover ratio moving higher and low price topping broader expectations. A reminder that the BoJ's Rinban schedule for May will hit after hours today, with participants seemingly eying the Golden Week holiday exit.
• Aussie bonds firmed, paring all of their overnight/early Sydney losses in the wake of the softer than expected local Q1 CPI data. YM +2.0, XM +1.0 at typing. The ACGB Apr '24/Nov '24 yield spread has flattened by 3.5bp today and sits 6bp shy of its intraday steeps. The softer than expected Q1 CPI reading has also been the driving factor here. A reminder that this spread is often used to gauge market pricing of the chances of the RBA extending its 3-Year yield targeting measure to ACGB Nov '24 from ACGB Apr '24. Elsewhere, ~30K of IRM1 traded in the wake of the CPI print, at one price, with ~20K lifted and ~10K given.