Bonds Hold Firm In Asia After Thursday Rally

There was little to really counter the negative feeling that surrounded Thursday trade. As a result, T-Notes traded through Thursday's high, but lacked any meaningful follow through, last trading +0-04+ at 138-09+. Cash trade saw yields richen by 0.4-1.5bp, with the curve bull flattening. Macro headline flow has been light since the re-open, with little of note on the Asia-Pac docket on Friday.

• •JGB futures held a tight range, with the only real news flow of note for the space surrounding COVID worry in Japan. The contract is last +12 vs. Tokyo settlement levels, while the cash curve richened, although the long end lagged for a second day, allowing super-long swap spreads to tighten.
• •In Australia, the AOFM's announcement re: next week's syndicated tap of ACGB 2.75% 21 May 2041, which will be up to A$6.0bn in size, added some pressure to the longer end of the space, before the broader defensive feel (and perhaps an eye on the upcoming cash flow dynamic within the space) provided fresh support. YM unchanged and XM +3.5 at typing. Worth flagging that early desk discussions covered some apparent overnight flattening flow, lodged via a block trade of 6.0K YM and 1.7K XM.