Core FI Firm Up Amid Broader Risk Aversion

T-Notes have advanced at the start to the week amid broader risk-off feel, stemming from a combination of the rapid increase in new Covid-19 infections in Europe and resultant restrictions imposed by European governments, record daily Covid-19 tally in the U.S., lack of any pre-election fiscal deal in the U.S. and pullback in the "Blue Wave" betting market pricing. When this is being typed, T-Notes trade +0-05 at 138-16+, hitting fresh session highs. Cash Tsy curve has bull flattened, yields sit 0.4-3.1bp lower. Eurodollar futures trade unch. to +0.5 tick through the reds. There is little of note on the Asia-Pac docket, which turns focus to broader headline and market flow.

• JGB futures have crept higher and last deal at 151.97, +15 ticks vs. last settlement and printing best levels of the session so far. Cash JGB yields sit lower across the curve. The BoJ left the sizes of its 1-5 & 10-25+ Year JGB purchases unchanged today. PM Suga will deliver a policy address later in the day, in which he is expected to reiterate his core pledges and make a commitment re: Japan's carbon neutrality.
• In Oz, YM +0.5 & XM +4.5, just shy of highs. Cash ACGB curve sits lower and runs flatter, with yields last 0.6-5.4bp lower. Bills trade -1 to +1 tick through the reds. We saw another solid ACGB offering from the AOFM, which auctioned A$1.5bn worth of ACGB Nov '28. Preliminary trade data showed that Australian exports rose 3% M/M, while imports fell 1% in September.