Core FI Nudge Lower, ACGBs Weighed On By Issuance Matters

T-Notes nudged lower and last trade -0-01 at 137-07, off session low of 137-05+. Comments from White House chief of staff Klain grabbed attention, as the official indicated that Biden's stimulus plan is "gaining momentum" on the Hill. Cash Tsy curve has bear steepened, with yields last seen 0.2-1.3bp cheaper. Eurodollar futures trade +0.5 tick through the reds.

• JGB futures have faltered from the off, in the wake of yesterday's slide in Tsys. The contract last trades at 151.82, 11 ticks shy of settlement & testing support from Jan 22 low. Cash JGB yields sit slightly above neutral levels, save for the marginally outperforming 2s. Tokyo CPI data & monthly labour market report topped exp. at the margins, while flash industrial output fell roughly in line with forecasts. The BoJ left the sizes of its 3-10 & 25+ Year JGB purchases unch.
• Aussie bonds came under pressure ahead of/around the pricing of A$3.0bn worth of QTC Aug '32 issuance (at XM +41bp), and also amid speculation that ACGB Nov '32 syndication might be announced (which didn't come to fruition when the AOFM released its weekly issuance slate). YM last -0.5 & XM -4.5 (off lows), while cash ACGB curve has bear steepened. Yields last seen unch. to +4.3bp. Bills trade unch. to -1 tick through the reds. In local data, private sector credit topped exp. at the margin. Elsewhere, the AOFM auctioned A$2.5bn of the 0.25% 21 Nov 2024 Bond.