Broader Based Moves

TYZ1 showed though Tuesday's low during Asia-Pac hours, before recovering from worst levels, to last print -0-01 at 130-04+, with the cash Tsy space running ~0.5bp cheaper across the curve at typing. An uptick in the USD helped to apply modest pressure. Macro headline flow was light overnight, with ACGB gyrations shaping early two-way price action. Wednesday's NY docket will see the release of housing starts and building permits data, 20-Year Tsy supply and Fedspeak from Williams, Bowman, Waller, Mester, Daly, Evans & Bostic.

• JGB futures tracked the broader impetus in core global FI markets, last -3. The major cash JGB benchmarks are -/+0.5bp on the day. The offer/cover ratios witnessed in the latest round of BoJ Rinban operations were as follows: 1- to 3-Year: 3.02x (prev. 2.83x), 5- to 10-Year: 1.84x (prev. 2.35x), 25+-Year: 4.15x (prev. 5.79x). This would have provided little, if any, trading impetus in the early part of the Tokyo afternoon.
• The ACGB space squeezed higher in the wake of Australia's Q3 wage price data, which failed to provide any upside surprise, printing in-line with broader expectations (+0.6% Q/Q, +2.2% Y/Y). The firming on the back of the in-line print was likely facilitated by the well-documented aggressive market positioning when it comes to the RBA hiking cycle (when compared to the Bank's own forward guidance). A reminder that the RBA has continually pointed to the likelihood that wages will need to rise by 3+% Y/Y to foster the inflationary outcome that it desires. The space eased away from highs as Tsys came under modest cheapening pressure and the impetus from the data release faded. The curve exhibited a twist steepening pattern, with YM +3.0 & XM -2.5. Pricing of A$700mn of 10-Year issuance from Australia Pacific Airports may have applied some pressure to XM.