Core FI Little Changed To A Touch Firmer In Asia

T-Notes have stuck to a narrow 0-02+ range overnight, last -0-00+ at 132-15. The major Tsy benchmark yields are virtually unchanged across the cash curve. Headlines were light at best, although some block flow was observed, with the latter coming in the form of a TY/US flattener (-6.0K vs. +2.5K) and a 3,765 block buyer of TYM1 at 132-14+

• The latest round of national Japanese CPI data was largely in line with exp., while some more details surrounding the impending state of emergency in Okinawa prefecture were given as speculation re: the extension of the state of emergency covering other regions of Japan still doing the rounds. The major cash benchmarks run little changed to ~1.0bp richer across the JGB curve, with the belly leading, while futures print +7 ticks vs. yesterday' settlement levels, operating within the confines of a narrow range. An average 20-Year JGB auction was witnessed, with the low price matching dealer expectations (per the BBG survey), tail widening and cover ratio nudging higher.
• Some trans-Tasman impetus seemed to be at play in the Aussie bond space, with a rally in the NZGB space on the back of a well-received round of NZGB supply (building on early momentum stemming from light offer to covers in the latest round of RBNZ LSAP ops). These matters, coupled with likely short positioning, likely allowed the Aussie bond complex to firm. YM +2.5, XM +4.5 at typing, swaps lagging cash ACGBs, resulting in some swap spread widening across most of the curve. Today's ACGB Sep '26 supply was easily digested, with the weighted average yield printing 0.62bp through prevailing mids (per Yieldbroker pricing) as the cover ratio firmed vs. the prev. auction of the line (even when we account for the downtick in the notional on offer at today's auction). It would seem that the supportive factors we highlighted in our auction preview underscored demand.