Core FI Softens In Asia

Antipodean matters dominated headline flow during the Asia-Pac session, with the weakness in that region's FI space perhaps leaning on T-Notes during a thinner liquidity session, with cash Tsys closed (on the back of the Veterans Day holiday), as the contract traded below the lows seen in recent sessions, last -0-03 at 137-11.

• JGB futures have held shy of Tuesday's settlement levels, trading either side of the overnight close thus far, last -7, and have been a little more insulated than the broader core FI space. Cash trade sees 20s outperform, with modest richening seen across the curve. The BoJ left the size of its 1-10 Year Rinban purchases unchanged, with little in the way of meaningful movement in offer to cover ratios.
• Trans-Tasman matters, namely the RBNZ decision and communique, has added fresh weight to the Aussie bond space, squeezing already long positioning. YM -2.5 and XM -6.5, after the latter threatened to break through the 1.00% implied yield level after a brief look through. A reminder that XM traders have used this zone to build longs in recent times, but the already long positioning may limit such a dynamic this time around.