Core FI Modestly Higher Overnight

T-Notes last +0-05 at 132-06, 0-01 off best levels, while cash Tsys trade unchanged to 1.0bp richer across the curve. There was some light interest to fade Wednesday's cheapening in U.S. Tsys during Asia-Pac hours, as regional participants stepped in after cheapening witnessed in the wake of the release of the FOMC's April meeting meetings (which were a little hawkish vs. most expectations). There was little in the way of overt tier 1 headline news overnight, with conflicting rumours surrounding the future of the Israeli-Palestinian conflict and the usual round of Sino-U.S. tension. Pockets of buying FV & TY futures helped the broader bid.

• JGB futures last -6 after failing to trade back to unchanged levels during Tokyo hours. The space initially benefitted from the uptick in U.S. Tsys and press reports pointing to the impending state of emergency declaration covering Okinawa prefecture (after the region recommended such a move on Wednesday). The majority of the major benchmarks on the cash curve print unchanged to 0.5bp richer on the day. The latest round of BoJ Rinban operations saw the sizes of the purchase buckets in play left unchanged, with marginal, albeit mixed (and inconsequential), moves observed in the offer to cover ratios.
• YM & XM both +1.0 in Australia, with very modest firming seen on the back of the disappointing headline fall in the number employed in the latest Australian labour market report, bringing to an end an impressive run of generally stronger than expected monthly releases. Still, it wasn't all doom and gloom, with no clear signs of any impact from the cessation of the JobKeeper scheme (per the ABS commentary flagged in an earlier bullet). It is interesting to note that the ABS flagged that "like we saw in January, the number of people taking leave over the Easter public and school holidays was also higher than in the past," with April's losses in employment driving solely by a fall in the number of part-time employed, which may be limiting the follow through from the release. Elsewhere, the participation rate edged lower, which actually allowed the unemployment rate to tick lower, even as the number employed dipped. The underemployment rate now sits at levels not witnessed since the middle of '14, while the underutilisation rate hovers around Dec '19 levels. Note, there had been some bearish setup via YM single-day options ahead of the release.