Another Narrow, Mixed Asia Session For Core FI

Very modest twist steepening was seen in Asia-Pac cash Tsy trade, although 30s only sit 0.7bp cheaper vs. Thursday's closing levels. Macro headline and market flow remains generally light, with participants seemingly happy to await developments surrounding the well-documented headline risk factors in play at present. T-Notes last -0-01 at 137-27+, with the contract holding to a narrow 0-02 range thus far.

• JGB futures held a narrow range during the morning session, before nudging higher in early afternoon trade, to last deal +8 on the day. Cash trade saw the long end of the cash curve continue to benefit from expectations surrounding a lower JGB issuance burden vs. what some had feared. The BoJ left the size of its 1-10 Year JGB purchases unchanged, with the following offer/cover ratios seen: 1-3 Year: 2.33x (prev. 2.77x), 3-5 Year: 1.67x (prev. 2.82x), 5-10 Year: 2.03x (prev. 2.51x). The moderation in the cover ratios seemed to be the supportive factor for futures and paper out to 10 Years in afternoon trade. Elsewhere, Japanese Finance Minister Aso noted that the country is likely to miss is estimated tax revenue for the current FY, although this will come as no surprise, with the local press already flagging the issue earlier this week. The Nikkei suggested that the current FY tax revenues are set for the biggest miss vs. expectations since '09.
• The long end of the Aussie cash curve has backed off firmest levels of the day but has outperformed. More broadly, continued focus falls on the negative net supply picture promoted by RBA ACGB purchases, while the AOFM issuance hiatus until calendar '21 provides further fuel to that fire (albeit with some semi-government bond issuance sprinkled in thus far). YM -0.8, XM +0.3.