Duration In Demand Into Month-End

The Tsy curve has flattened, with yields now 0.6-3.0bp richer across the cash curve. Little of note on the headline front points to a willingness to follow out-of-timezone moves on the part of Asia-Pac participants, or perhaps month end rebalancing flows/extensions kicking in. T-Notes through yesterday's high, last +0-04+ at 140-05, 10s through the recent range lows in yield terms.

• A combination of underperformance in local equity markets and continued interest in long end swaps allowed JGBs to shrug off the uptick in cover ratio in the 25+ Year Rinban ops, with tighter spreads across today's ops also countering the uptick in longer dated offer/cover. JGB futures pushing on in afternoon trade as a result, last +16 at 152.47, nearing the technical bull trigger at 152.50.
• Month-end flows were in the driving seat for Aussie bonds, with the long end outperforming in cash trade on the back of the huge month-end extensions stemming from the large syndication of the new ACGB Jun '51 (as we highlighted earlier this week). YM +0.5 and XM +3.5. No movement for the space on the back of local data, nor on the Chinese official PMI readings. he AOFM provided a typical issuance slate for next week.