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Modi, AMLO Top Major Economy Leader Poll, Macron Last


Under Pressure


Trend Condition Remains Bearish


The U.S. Tsy space has settled down after the bout of volatility witnessed around the cash market re-open, which represented the regional reaction to Fed Chair Powell's Thursday address, subsided. Steepening still the driving theme, with yields running -0.4 to +4.7bp across the curve, T-Notes -0-04+ at 138-27, backing away from the early lows.

  • JGBs were not immune to the broader pressure seen in core FI markets during Tokyo trade, although the sell-off was more limited vs. what was seen elsewhere. Nonetheless, futures extended on their overnight losses, last -21 ticks vs. settlement levels, just off worst levels of the day. The long end of the cash curve underperformed, with swap spread widening evident there, suggesting paying in the long end of the swap curve aided the weakness. Elsewhere, 7s were soft, with the move in that area of the curve likely driven by futures. 10-25+ Year BoJ Rinban operations saw the purchase sizes left unchanged, with the 10-25 Year ops seeing a moderation in the offer/cover ratio, and a notable widening of spreads, while 25-Year ops saw a marginal uptick in offer/cover and another notable widening in spreads (ahead of next week's 30-Year JGB auction). Focus now falls on an address from PM Abe, scheduled for later today.
  • Aussie bond futures fell afoul of the broader pressure, building on SYCOM losses, with YM -1.0 and XM -10.0, as the latter ran below 99.00 i.e. 1.00% implied yield. The weekly AOFM issuance docket would best be described as somewhat vanilla.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |