Aussie XM Heavy, Knee-Jerks Lower On CPI Report

T-Notes have slipped in early Asia-Pac trade, but have been happy to hold a familiar range so far. The contract changes hands -0-01 at 137-11 at typing. Light steepening has hit the cash Tsy curve, with yields sitting unch. to 0.8bp cheaper. Eurodollar futures trade +0.5 to -0.5 tick through the reds. Flow has been dominated by the now familiar TYJ1 risk reversal block trade (with another 10K of puts lifted against calls).

• JGB futures blipped higher early on and last trade at 151.96, 2 ticks above settlement. Cash JGB curve has steepened at the margin. Today's round of 1-3 & 10-25 Year Rinban ops saw no changes to the BoJ's purchase sizes.
• Better than expected Australian CPI data applied some brief pressure to ACGBs, but it dissipated as focus moved to the driving factors outlined before. YM unch. & XM -3.5 at typing, with the latter heavy from the off. Cash ACGB curve has bull flattened & yields sit 0.1-2.3bp lower on the back of yesterday's local holiday. Bills run unch. to -1 tick through the reds. The RBA offered to buy A$1.0bn of semi-gov't bonds, covering maturities of Jul '28 - May '32.