Core FI Mixed In Asia

Fresh record highs for both the S&P 500 & NASDAQ 100 e-mini contracts applied some very modest pressure to the Tsy space, although tight ranges were in play in the space overnight. T-Notes last -0-01+ at 130-17, sticking to a narrow 0-04 range. Cash Tsys are ~1.0-1.5bp cheaper across the curve. Macro headline flow remains very light. NY hours will be headlined by Fedspeak from Vice Chair Clarida & Governor Waller. We will also see the House vote on President Biden's BBB Bill. A note that the CBO & the White House are at loggerheads re: the "paid for" status of the BBB scheme.

• JGB futures extended their overnight uptick, +11 into the bell. Confirmation of the rumoured Y55.7tn fiscal spending package (with total support meeting the expected Y79tn watermark) via Japanese PM Kishida seemingly applied some modest pressure in the morning, with the need for swift compilation (by year end) and disbursement highlighted. A fresh bid came in during the Tokyo afternoon. Cash JGBs run flat to 1.5bp richer across the curve, with 30+-Year paper seeing some light outperformance on the lessening of issuance concerns re: the fiscal package (surplus holdings and unused funds from previous stimulus schemes may be able to do a fair chunk of the heavy lifting).
• Aussie bond futures looked through the release of next week's AOFM issuance slate, even with another A$300mn added to nominal coupon issuance (which now sits at A$2.8bn vs. this week's A$2.5bn), via ACGB Jun-51 supply on Monday. The AOFM has departed from the recent norms in terms of the number of ACGB auctions (2), with 3 rounds of coupon supply due next week. We will also see a notable uptick in Note issuance, which rises to A$5bn from the typical A$2bn. It looks like the AOFM is looking to rebuild its cash buffers. YM unch. & XM -1.5 at the close, with tight trade in play on Friday. Elsewhere, the latest round of ACGB Nov-24 supply passed smoothly, with relative and outright plays likely facilitating strong pricing as the weighted average yield printed 0.87bp through prevailing mids (per Yieldbroker). A reminder that heavy borrowing via the RBA's SLF also pointed to the potential for a strong auction. The cover ratio eased a bit vs. the prev. auction of the line, but that metric was particularly strong last time out and still printed comfortably above 4.50x this time around.