Core FI Happy To Hug Tight Ranges, ACGB Supply Well Received

T-Notes -0-01 at 133-02 at typing. The contract traded sideways, sticking to the confines of a 0-03 range. Cash Tsy curve runs flatter, with yields last seen flat to 0.9bp richer across the curve. Eurodollars sit +0.5 to -0.5 tick through the reds. Fiscal headwinds remain apparent, with Axios circulating a report pointing to a lack of breakthrough on that front, after talks between Pres Biden & key Democratic Senator Manchin yielded no progress. The preliminary reading of University of Mich. Sentiment takes focus from here.

• JGB futures ground higher initially, topped out at 151.75 and eased off into the Tokyo lunch break. The contract last sits at 151.71, 7 ticks shy of previous settlement. Cash JGB yields are marginally mixed. Official campaigning for LDP leadership election kicks off today, while Japan will observe a public holiday on Monday.
• Aussie bond futures held tight ranges, YM last trades -1.5, with YM -3.5. Cash ACGB yield curve has bear steepened, albeit yields have eased off initial highs. Bills run unch. to -2 ticks through the reds at typing. The supply of ACGB Apr '33 was well received by the market, as the dynamics surrounding relative appeal and expectations for the bond to outperform into XMH2 basket inclusion seemingly outweighed the headwinds touted ahead of the supply.