JGB Spill Over Weighs

The previously alluded to Tokyo morning weakness in broader JGBs (and continued pressure for JGBs out to 10s in late Tokyo trade) provided a cheapening impulse for U.S Tsys in a news light Asia-Pac session.

• The space heads into London a little off worst levels, with the wider cash Tsy benchmarks running 1.0-3.0bp cheaper across the curve, with 10s leading the weakness, while TYH3 is -0-05+ a 113-11+, 0-02 off the base of its 0-07+ range with volume sitting at ~63K.
• The early cheapening impulse ran out of steam as bears only failed to force an incremental and short-lived look below Tuesday’s base in TYH3. Some oscillation has been seen thereafter, albeit within contained ranges after 7+-Year paper bested Tuesday’s highs in yield terms.
• There wasn’t anything to note in the way of major market flow during Asia-Pac hours, given the proximity to the Christmas break and lack of meaningful headline drivers.
• Looking ahead, consumer confidence and existing home sales data headlines in NY hours, with 20-Year Tsy supply also due.