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Familiar Themes In Play Across The Board In Asian Hours


T-Notes have stuck to the 0-02+ range that was established early on in Asia, last dealing +0-00+ at 133-15, while cash Tsys trade little changed to ~1.0bp cheaper on the day. Asia-Pac hours have been light on both macro headlines and broader market flow, leaving participants on the sidelines. Weekly jobless claims data, challenger job cuts and final durable goods data will hit during NY hours. Elsewhere, we will hear from Fed's Bostic & Daly, while the Tsy will make its mid-month supply announcement. Broader focus remains on Friday's NFP release.

  • JGB futures failed to build on their overnight gains, last +2 vs. settlement, a little shy of overnight closing levels. The major cash JGB benchmarks sit little changed to 1.0bp richer after catching up to the overnight move in futures/U.S. Tsys. Swaps generally lagged JGBs, resulting in some very modest swap spread widening from 5-Years to further out the curve. Domestic news flow has seen the political sabre rattling continue. Elsewhere, BoJ dovish dissenter Kataoka reiterated his well-known stance re: a requirement for deeper monetary easing. The latest round of 10-Year JGB supply saw the low price match broader dealer exp. (per the BBG poll), while the price tail narrowed incrementally vs. the prev. auction and the cover ratio held steady, a touch above the 6-auction average (3.26x). A reminder that several desks suggested that 10s lacked any true outright appeal under the current market regime ahead of supply.
  • Aussie bond futures have settled into a narrow range after the impetus from the early Sydney uptick faded, with YM +1.5 and XM +4.0 at typing, while the broader cash ACGB curve saw the 10- to 15-Year sector of the curve outperform. The space has looked through the latest round of local data releases, with July's trade balance registering a record surplus, while the broad headline housing finance print provided a surprise, albeit modest, uptick. Local COVID case numbers haven't had any impact on the space, with vaccinations & a new living with COVID mentality at the fore for policymakers in recent weeks. Finally, ANZ became the latest notable name to outline their expectations for the RBA to delay its tapering move come the end of next week's monetary policy decision.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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