Core FI Off Lows In Asia, Cash Tsys Closed

TYZ1 had a look through Wednesday's low before recovering, last -0-02+ at 130-21+ vs. worst levels of 130-15. Initially, the spill over from the U.S. session, an uptick in Chinese equities and second round weakness in the ACGB space weighed. Cash Tsys will not trade on Thursday owing to the observance of the Veterans Day holiday. Downside interest has headlined on the flow side in the STIR space, with screen buying of 0EX1 99.00 puts seen (~15K lots lifted in total thus far).

• JGB futures saw a marginal extension of their overnight weakness as U.S. Tsy futures came under some pressure, before recovering, last dealing 13 ticks below settlement levels. Cash JGBs ran little changed to 1bp cheaper across the curve. Note that much firmer than expected domestic PPI data was witnessed, although there wasn't much in the way of tangible reaction post-release.
• Aussie bond futures rallied on the surprise fall in headline employment and larger than expected uptick in the unemployment rate in the latest domestic labour market report. However, the rally was capped as the report wasn't quite as bad as the headline figures suggested, with the space drifting back to cheaps as a result, before recovering later in the day. The uptick in the unemployment rate was partially driven by an uptick in the participation rate, which reflected more people looking for work as COVID restrictions in NSW were about to wind down. Job ads data, the subsequent removal of COVID restrictions in NSW & Victoria (after the sample period covering the data release) and the latest ABS payrolls print had most pointing to the potential for positive readings in the coming months (albeit with the potential for volatility). YM -12.5 & XM -8.0 at the bell, with bear flattening the theme throughout the day.