Aussie Supply Weighs On U.S. Tsys & ACGBs

Asia-Pac headline flow was sparse at best. Still, T-Notes have edged to fresh session lows ahead of European hours, and last print -0-05 at 131-15 on the back of a couple of 2.5K clips worth of TYM1 selling (on screen). The cash curve has bear steepened, longer dated Tsys are running ~2.5bp cheaper on the day, with some light pressure evident from spill over surrounding Australian bond supply matters and news that Tencent will price a $4bn round of US$ issuance as soon as today. Most participants are looking ahead to today's local risk events (U.S. CPI, 30-Year Tsy supply and the announcement re: the Fed's latest Tsy purchase schedule). We should flag that Chinese trade data for the month of March provided a much narrower than expected headline trade surplus, with mixed internals as exports rose at a slower than expected Y/Y rate while imports surged, as the Y/Y rise in that metric topped exp.

• JGB futures clung to a narrow range, last dealing unchanged, cash JGBs are running unchanged to a touch richer on the day, with the long end of the curve drawing some light support from a firm enough round of supply (in the form of a liquidity enhancement auction for off-the-run 15.5- to 39-Year JGBs). On the corporate supply front, reports suggested that Softbank is planning to sell 5-, 7- & 10-Year JPY paper.
• ACGB Nov '32 syndication-related hedging resulted in above average activity for XM, and pressure on the Aussie bond space. YM -2.5, XM -4.0 at typing. this was the dominating factor with nothing in the way of tangible input from the latest round of ABS payroll data and the NAB business survey.