ACGBs Outperform On Lead From NZ, Tsys & JGBs Seek Clear Direction

T-Notes have wobbled as the initial uptick proved short-lived and the contract has moved away from its session high of 131-19+ and last trades unch. at 131-17+. Cash Tsy yield curve has bull flattened a tad, yields trade unch. to -1.3bp at typing. Eurodollar futures sit +0.5 to -0.5 tick through the reds. Snips from the upcoming Fed Chair Powell's testimony to the House Financial Services Committee (he will appear there alongside Tsy Sec Yellen today) have been doing the rounds, with the Fed chief noting that "the recovery is far from complete, so (...) we will continue to provide the economy the support that it needs for as long as it takes." Fed's Bowman struck similar notes in her latest address, noting that the Fed is "likely to continue supporting the economy for some time," as it is "still a long way" from the employment/inflation goals.

• JGB futures have wavered and now trade at 151.30, unch. vs. last settlement. Cash JGB yield curve has twist flattened, with 20s leading the way as we type. Japanese MoF flagged that the virus reserve fund has Y508bn remaining, while Japan's FinMin Aso said that there are no plans to immediately hike taxes, although the gov't maintains its aim for FY2025 primary balanced budget goal. Looking ahead, there is a 1-5 Year enhanced liquidity auction & final machine tool orders data coming up today.
• NZGB space has been of interest for neighbours from across the Tasman again, after catching a bid on the back of measures to cool housing prices announced by NZ gov't. YM sits +0.5 & XM +1.0, off earlier highs. ACGB yield curve generally runs flatter as yields sit +0.4bp to -2.0bp, though 5s outperform (mimicking NZGB dynamics). Bills trade unch. to +3 ticks through the reds. The AOFM auctioned A$150mn of 0.75% 21 Nov '27 linkers, attracting bid/cover ratio of 5.17x.