Core FI Pressured By Trump's Fiscal Remarks, Japan Observes Market Holiday

T-Notes tested 140-00 in early Asia-Pac trade, as the combination of spiralling Sino-U.S. tensions, global coronavirus worry and lack of clarity on U.S. fiscal matters inspired a defensive feel. U.S. President Trump's executive orders on coronavirus relief measures drew substantive as well as procedural criticisms, as Democrats cried foul over alleged executive overreach. In addition, a number of state governors pushed back against the memorandum requiring states to fund 25% of the weekly enhanced jobless benefits. T-Notes backed off highs as the President told reporters that some states could be relieved of the duty to foot part of the bill, which will be decided on a case-by-case basis, and suggested that Democrats are willing to return to the negotiating table. The contract trades through Friday's trough as we type, last -0-01 at 139-29+, after operating within a 0-03+ range. Eurodollar futures last seen unch. to -0.5 tick through the reds. Cash Tsys are closed until the London open, owing to a market closure in Japan. Singapore also observes a public holiday today.

• Aussie bond futures edged lower, driven by the broader risk impetus, despite continued worry over Victoria coronavirus situation & weekend comments from FinMin Cormann, who reaffirmed plans to reduce "historic, crisis-level" fiscal stimulus. YM -0.5 & XM -3.5 at typing. Curve has twist steepened in cash trade, with yields sitting -0.3bp to +3.5bp. Bills last deal unch. to -1 tick through the reds. The RBA returned to the market with its YCC ops, offering to buy A$1.0bn worth of ACGBs (eligible maturities: Apr '23 & Apr '24).