Ebb & Flow

T-Notes (citing the M1 contract) started the Asia-Pac session by partially retracing their Friday downswing, but failed to cling onto those early gains. The contract topped out at 132-00+ and pulled back into negative territory. It last trades -0-01+ at 131-23+, hovering just above session/Friday's low of 131-23. Cash Tsy curve bear steepened, with yields last seen 0.6-1.7bp higher. Eurodollar futures sit up to 1.0 tick lower through the reds. The main focus overnight fell on China's monthly economic activity data, which were a mixed bag (though closely watched industrial output & retail sales topped expectations), distorted by a large base effect & impact of the LNY holidays. In the U.S., an interview with Tsy Sec Yellen grabbed attention, as she downplayed the inflation risk and that there's no decision on whether to pursue a wealth tax yet.

• JGB futures were in demand from the off, smoothly surging past Friday highs in early dealing. The contract edged away from its best levels thereafter and last sits at 151.06, 7 ticks higher on the day. Cash JGB yields are lower, with belly outperforming at the margin. Japan's core machine orders recorded the first monthly drop in four months, but the decline was shallower than expected.
• Cash ACGB curve steepened at the re-open, but yields moved off steeps later in the session and last sit -0.5bp to +7.8bp. Aussie bond futures crept higher before paring some gains, YM last trades unch. & XM -8.6 ticks. Bills trade 1-3 ticks lower through the reds. Little to write home re: RBA Gov Lowe's latest address. Elsewhere, the Reserve Bank offered to buy A$2.0bn of ACGBs with maturities of Nov '24 to May '28, excluding ACGB Sep '26, as part of its bond-buying scheme.