ACGBs & JGBs Sit Off Best Levels

There has been nothing in the way of Asia-Pac follow through in the wake of Monday's U.S. Tsy rally/curve flattening, which unwound Friday's cheapening/steepening. T-Notes were seemingly happy to operate within the confines of the range witnessed ahead of the NY close, leaving the contract -0-01 at 132-07+ at typing, on meagre volume of ~35K. Yields are little changed across the cash Tsy curve, with nothing in the way of notable headline flow witnessed overnight.

• Monday's bid in U.S. Tsys meant that the major cash JGB benchmarks were generally flat to 1.0bp richer during Tokyo dealing, with 7s leading the bid, although futures faded from overnight levels to last deal +6 vs. yesterday's settlement, even as domestic equities came under some modest pressure. The latest round of local retail sales data was loosely in line with broader exp., while there was a 0.2 ppt uptick in the unemployment rate vs. 0.1 ppt exp. A decent enough round of 2-Year JGB supply was seen as the cover ratio nudged higher and low price topped dealer expectations (100.235 per the BBG dealer poll), although the tail did see an incremental widening vs. the previous round of 2-Year supply (it was still limited in nature).
• The Aussie bond space looked through the imposition of tighter COVID restrictions in areas of Queensland over the coming days, leaving YM +1.5 and XM +5.0 at typing. There has been little to note outside of the early spill over from U.S. Tsys and developments on the local COVID front.