Caught In The Middle Of Cross Currents

Sizable month-end rebalancing/duration extension estimates for Tsys cushioned the broader core global FI space in early dealing this week, as did the dip in crude oil prices, which provided some counter to the modest early uptick in e-minis and stronger than expected Chinese PMI data. Still, core FI markets stuck to tight ranges as Asia-Pac markets closed out the month of November.

• T-Notes unchanged, last printing at 138-06, with the contract sticking to a 0-02+ range overnight, on light volume. Cash Tsys are little changed across the curve. The space has seen little in the way of meaningful outright flows.
• Mixed local data has done little to move the needle for Aussie bonds, while broader macro headline flow remains light, making for a rangebound start to this week's Sydney trade as participants look to a busy local docket over the coming days. YM -1.0 XM unchanged. Swap spreads edge wider across most of the curve.
• JGB futures sit 5 ticks below settlement levels after softening in early Tokyo dealing this week, perhaps as participants keep one eye on the upcoming rounds of JGB supply. The latest round of BoJ Rinban ops seemingly has little in the way of notable impact on the space, despite a jump in the offer/cover ratio for the 25+ Year operations.