Another Round Of Mixed Performance

T-Notes held to a narrow 0-06 range overnight, last +0-02 at 132-11+. Cash trade sees some twist steepening of the curve, with 30s cheapening by ~1.5bp on the day. There was nothing in the way of notable headline flow seen overnight, with participants looking ahead to 10-Year Tsy supply and the latest U.S. CPI print, both of which will hit later on Wednesday. Eurodollar futures run unchanged to +2.0 through the reds, with a couple of rounds of buying witnessed in the reds during early Asia-Pac dealing as T-Notes traded through Tuesday's high.

• •JGB futures ticked lower during the morning session, unwinding the overnight uptick, before finding a modest bid during the afternoon, last +5. Cash trade has seen some light bull flattening, even ahead of tomorrow's 20-Year JGB supply. Swap spreads have generally widened a little across the curve, although the morning uptick in outright swap rates has unwound. There has been nothing in the way of tier 1 local headline flow.
• •The Aussie bond space continues to lean on support from the earlier round of rhetoric from RBA Governor Lowe (see earlier bullets for full details), in which he pushed back against market pricing re: the cash rate and didn't discount a suggestion that Australia's NAIRU could be below 4.0% when questioned on the matter. The space continues to operate shy of the knee jerk highs witnessed on the back of Lowe's comments, but futures are comfortably higher on the day, YM +2.4, XM +6.8. Roll activity continues to dominate. The latest round of ACGB Nov '31 supply didn't see the strongest round of demand, but average yields still managed to stop through prevailing mids by ~0.2bp. The cover ratio softened notably vs. the previous auction of the line, with reduced Japanese demand, futures rolls and the recent bond vol. likely suppressing demand (as flagged pre-auction).