Further Modest Pressure For Core FI In Asia

U.S. Tsys were subjected to some light pressure overnight, with U.S. President Trump pledging to work towards a smooth transition for the incoming Biden administration and cautiously optimistic news flow surrounding existing COVID 19 vaccines being effective against the recently discovered variants of the virus at the fore. T-Notes now sit below their Thursday low, with the contract last -0-06+ at 136-24, while the cash curve has been subjected to some bear steepening, with 30s sitting ~2.5bp cheaper on the day at typing.

• There was no reaction in JGB futures to the soft round of 30-Year supply, with the contract sticking to a tight range, last dealing -3 vs. settlement. 30s were also little moved in the wake of supply (unwinding a brief, limited nudge higher in yields), while JGBs are marginally mixed across the curve with no sign of any uniform underperformance in the longer end.
• Aussie bonds have largely taken direction from U.S. Tsys, with YM -1.0 and XM -4.0 at typing, although Sydney ranges have been confined. News of a short-term COVID lockdown for the greater Brisbane area and positive COVID-19 vaccine procurement developments did little for the space.