Fed Hawks Cast Shadow Over Asia

The impact of Tuesday's hawkish Fedspeak is seemingly trickling into core FI space, hurting major futures contracts. As a reminder, Fed's Brainard called for a swift reduction in the central bank's balance sheet from as soon as next month, while her colleague Mary Daly later echoed this view. Worth flagging today's re-opening of markets in China, Hong Kong and Taiwan after public holidays.

• TYM2 changes hands -0-05+ at 120-24, after initially extending yesterday's losses to a fresh cycle low of 120-22. Eurodollars run unch. to -5.5 ticks through the reds. Cash Tsy yields have moved higher still and last trade +1.7-2.7bp across a slightly flatter curve. The minutes from the FOMC's March monetary policy meeting headline the local docket on Wednesday, with Fed's Harker due to discuss the economic outlook.
• JGB futures have wobbled and last operate at 149.49, 27 ticks shy of previous settlement. Cash JGB yields have mostly pushed higher, while the curve runs steeper. Little of note on the local docket today, but participants will be vigilant for any potential unscheduled JGB purchases by the BoJ.
• 10-Year ACGB yield surged to its highest point since 2018 (intraday peak was 2.950%) as Sydney trade re-opened and Aussie bonds absorbed overnight market impetus. Cash ACGB yields last trade 6.7-8.7bp, curve runs a tad flatter. Bills trade 6-12 ticks lower through the reds. The supply of ACGB May '30 and a parliamentary testimony from RBA's Bulock & Kent are the main points of note in Australia today.