Core FI Markets Stick To Tight Ranges In Asia

T-Notes stuck to the confines of a 0-02+ range in Asia, last -0-05 at 131-25, with the movement in the Chinese yuan garnering the most attention early this week after Chinese state owned media and a mixture of former & current policymakers flagged risks to those betting on a continued appreciation in the CNY vs. the USD. Broader headline flow and market moves remain limited as the U.S. and the UK observe holidays on Monday, with the former resulting in the closure of the cash Tsy market.

• JGB futures ticked away from overnight highs during the Tokyo morning, given the moves in T-Notes during late NY/early Asia dealing, but still sit 4 ticks above Friday's settlement levels. The major benchmarks across the cash curve generally sit within 0.5bp of Friday's closing levels, trading firmer in the main. On the data front, domestic prelim. industrial production and retail sales missed expectations, but there has been little else to note outside of some limited activity in the JPY corporate issuance space. 2-Year JGB supply passed smoothly enough, with the low price meeting broader dealer expectations (proxied by the BBG dealer poll), although the internals were mixed, with the cover ratio softening a touch as the tail narrowed.
• Yields are little changed across the Aussie curve, with slightly softer than expected domestic private credit data and in-line with broader exp. official Chinese PMI readings doing little for the space. The front end of the curve remains underpinned, with lifts in the white IR contracts headlining the session thus far. YM unch., XM -0.5, with Bills running unchanged to -2 through the reds.