Core FI Narrow In Asia

T-Notes meandered along in a narrow 0-02 range overnight, last -0-02 at 132-27, with cash Tsys trading unchanged to ~0.5bp cheaper across the curve. There has been a lack of meaningful macro headlines. Details surrounding the high-level Sino-U.S. phone call (involving the senior trade negotiators on both sides) were sparse, although the dialogue was deemed constructive and candid, as both parties expressed the importance of their bilateral relationship. Flow was headlined by a 5K block seller of the FVN1 124.00 calls at 0-13+,

• There was nothing in the way of reaction seen in futures in the wake of the latest round of JGB supply, with super-long paper firming a touch in cash trade. The high yield witnessed at the 40-Year JGB auction came in 0.5bp below broader expectations (per the BBG dealer poll), with the cover ratio holding steady as the percentage of the paper allotted at the high yield moderated. Futures last +4, after edging away from late overnight session levels at the Tokyo re-open, as local participants reacted to the modest cheapening that was seen in U.S. Tsys in the latter rounds of NY dealing. The major cash benchmarks run little changed to ~1.0bp richer on the day at typing.
• Aussie bonds failed to exhibit a tangible reaction to the official declaration of a fresh COVID-related lockdown in the state of Victoria given the earlier press reports pointing to such a move. YM unch., XM +1.5 at typing. On the domestic data front, private capex for Q1 was firmer than expected, with positive revisions for FY21/22 investment expectations (+7.9% from the initial estimate). The strong headline reading was driven by the equipment, plant and machinery component, which bodes well for the GDP release, building on the theme of decent domestic driven partials, although some of the offshore driven inputs aren't as encouraging.