ACGBs Underperform In Asia

T-Notes struggled for a clear sense of direction in Asia-Pac trade, with no real game changing moments identified in the final Trump-Biden debate. Still, volume in the contract was still above average overnight, with the contract last +0-00+ at 138-11 after the contract managed to recover from worst levels. Cash Tsy trade has seen light bear flattening creep in.

• JGB futures sit 14 ticks below settlement, after edging away from worst levels, after bears failed to force a challenge of trend support at 151.75. 7s and 40s were the weak points on the cash curve, with the former likely linked to weakness in futures, while the longer end weakness would fall in line with the steepening pressure witnessed in U.S. Tsys on Thursday. The Japanese swaps curve also steepened. There was nothing of local note to drive the space.
• Aussie bonds steepened with XM trading as much as 6.0 ticks lower vs. settlement before edging away from worst levels, having unwound all of the gains it saw in the wake of RBA Governor Lowe's October 15 address. The latest ACGB '26 auction was solid, although the cover ratio wasn't particularly standout by recent standards (~4.50x), but the pricing was strong, with average yields stopping ~0.9bp through prevailing mids at the time of supply (per BBG prices).