Core FI Ebb Off Early Highs, Tsy Curve Bull Flattens Upon Return From Holidays

The U.S. returns to the market after the Thanksgiving holiday, with cash Tsy curve subject to bull flattening. Yields trade 0.6-3.5bp richer as we type. T-Notes have moved higher and topped out at 138-17+ in early trade, before pulling back. The contract last changes hands +0-06+ at 138-15. Eurodollar futures trade unch. to +0.5 tick through the reds. News flow has been sparse in Asia, saw U.S. Pres Trump tell reporters that he will give away power if the Electoral College votes for Joe Biden. On a potential return for the 2024 election, the sitting POTUS said that he didn't "want to talk about 2024 yet".

• JGB futures staged a similar round trip to T-Notes. The contract rallied through overnight highs to 152.19 before erasing gains as the Nikkei 225 has pushed higher. It last trades at 152.14, 4 ticks better off vs. last settlement. Cash JGB yields trade lower across the curve, save for 20s & 40s. As a reminder, primary dealers told the MoF yesterday that the market can absorb more 20- and 40-year issuance. Tokyo witnessed a faster deflation than expected this month, across the headline and core metrics. Focus turns to the auctions of 3-Month Bills & 2-Year JGBs.
• In Australia, YM -0.5 & XM +1.5, with the latter already off earlier highs. Cash ACGB curve has bull flattened, yields trade 0.6-1.5bp lower. Bills trade -1 to +1 tick through the reds. The AOFM released its weekly issuance slate, see earlier bullets for the details. Elsewhere, the AOFM auctioned A$1.5bn worth of ACGB 0.50% 21 Sep '26.