Choppy, Contained Trade Ahead Of Global Risk Events

Negative news flow evident over the weekend (centred on the lockdown situation in Europe & the UK) resulted in risk-off flow early on in Asia, adding to a degree of caution ahead of this week's risk-laden U.S. docket, providing a bid for Tsys. However, T-Notes are now back from best levels, last +0-00+ at 138-07+, after the Nikkei 225 traded on the front foot, which allowed 5&P 500 e-minis to bottom out and unwind early losses, with cash Tsys sitting unchanged to 1.5bp richer across the curve, with 10s leading. A ~2.5K block sale of T-Notes also helped the space back from early highs. Headline flow has generally been light since the re-open, outside of a stronger than expected round of Chinese Caixin manufacturing PMI data, which had no real impact on the space.

• JGB futures unwound the bulk of their overnight losses in early Tokyo trade, before holding a narrow range. Futures last sit 3 ticks softer than settlement levels. Cash JGB yields are marginally mixed. Comments from PM Suga offered little new, with little of note locally on Monday ahead of Tuesday's holiday.
• In Australia, XM ticked away from early Sydney/SYCOM lows, allowing the space to flatten at the margins, and there has been little in the way of retracement, with YM unch. and XM +0.5. Local data provided little real impetus for the space. Aussie 10s are holding tighter vs. U.S. 10s ahead of tomorrow's RBA decision.