Core FI Marginally Firmer To Start The Week

Tsys drew some early support from geopolitical tensions surrounding Russia, while there may have also been some focus on an Axios source piece which noted that "the universe of Democratic senators concerned about raising the corporate tax rate to 28% is broader than Sen. Joe Manchin, and the rate will likely land at 25%," which could pose some hurdles for the broader fiscal impetus in the U.S. T-Notes edged away from highs as e-minis pared their early losses, with the former last trading +0-01+ at 132-13+. The belly outperforms in cash trade with 5- to 10-Year paper richening by ~1.5bp vs. settlement levels as of typing. Asia-Pac flow was headlined by a 20.0K block lift of the TYM1 131.00/130.00 put spread, which saw paper pay 0-11.

• The cash JGB space trades flat to 1.0bp richer at typing, with futures last +6, a handful of ticks shy of best levels. The previously flagged Tokyo state of emergency questions and the broader (modest) risk aversion evident in early trade this week provided initial support for the space, which held even as the Nikkei 225 unwound its early losses. The lunch break saw the Governor of Osaka note that the region will request the implementation of a state of emergency, with Chief Cab. Sec. Kato noting that prompt consideration is required re: the Tokyo & Osaka state of emergency situations. A quick look at the offer/cover ratios witnessed in today's BoJ Rinban operations (note that the 25+ Year operations represented the first round of operations in that bucket since the well-documented tweaks announced at the back end of March) revealed steady cover for 25+ Year ops and an uptick for the 3- to 5-Year ops.
• The broader defensive feel has fed into the Aussie bond space, allowing futures to unwind their overnight losses, while yields sit unchanged to 1.0bp lower across the major benchmarks in the cash ACGB space. YM unch, XM +0.5. at typing. The only real point of note on the local front has been the launch of TCV's new '33 line, the deal is set to price on Tuesday.