Frenetic Asia Session Wire Fire At Ukrainian Nuclear Plant Controlled

Sharp risk-off flows kicked in as reports did the rounds of a fire at Ukraine’s largest nuclear power station (the largest such facility in Europe), with the Ukrainians pointing to a Russian shelling of the facility. It took some time before it became apparent that the fire was limited to an administrative building on the outskirts of the complex, with the nuclear reactors avoiding anything in the way of material damage. Caution remained apparent for the remainder of the session.

• TYM2 is +0-15 last, printing 127-31+, well shy of the peak of its 1-15 Asia range, operating on ~450K lots ahead of European hours. Cash Tsy trade sees the major benchmarks run 1.5-5.0bp richer, with 7s leading and 2s lagging. Comments from NY Fed President Williams didn’t move the market, as he looked to play down stagflationary worry and OK’d a series of rate hikes from March. Selling in the very front end of the Eurodollar strip has been apparent into European hours, perhaps as European traders look for an extension in yesterday’s EDH2/SFRH2 & FRA/OIS widening (which was primarily driven by a jump in the 3-month LIBOR fixing and 40K block sale of EDH2). Monthly NFPs headline the docket during NY hours.
• JGB futures finished 8 ticks higher, but 26 ticks off of their session peak. Cash JGBs ultimately bull flattened, with the 5- to 7-Year zone underperforming as JGB futures moved back towards neutral levels. There hasn’t been much in the way of meaningful domestic headline flow, with Japanese PM Kishida flagging the importance of FX rates moving in a stable manner. He also made a pledge that the government will do all it can to manage the economy and fiscal policy in an appropriate manner. Kishida then noted that he wants the BoJ to continue to aim for the 2% inflation level, while stressing that he will pick the “most appropriate” successor for BoJ Governor Kuroda. Finally, Kishida pointed to pressure on oil producing nations to boost supply, while Chief Cabinet Secretary Matsuno noted that the cabinet has approved a Y360bn response re: higher oil prices (with more to come next FY, if required).
• Aussie bond futures followed the broader gyrations when it came to risk appetite, with futures quickly unwinding overnight losses, before returning to near neutral levels. That left YM -2.0, while XM was +1.5 at the bell. Cash ACGB trade saw cheapening further out the strip (in the 15+-Year zone), while the 7- to 12-Year zone firmed a touch. The IR strip settled 3-9bp cheaper through the reds, after a volatile session, with the late whites and early reds leading the way lower. There wasn’t much in the way of meaningful domestic headline flow.