JGBs Bid Despite Soft Auction, Tsys & ACGBs Not As Firm

T-Notes were subjected to some light pressure in Asia-Pac hours as month-end support disappeared, although the contract held a tight -0-04 tick range, last -0-02+ at 139-05+. Yields sit unchanged to 1.1bp cheaper across the curve, with light steepening apparent in the cash space. There was little in the way of tier 1 macro moving news flow, with USD weakness in the FX space stealing the attention. Chinese Caixin m'fing PMI topped expectations, although it is very difficult to draw any conclusive inference from that dataset at present. Domestically, the fiscal impasse continued on the Hill in DC. Participants now await an address from Fed Governor Brainard and the latest ISM m'fing survey, both of which are due later today. On the flow side we saw a 5.0K block seller of the USV0 176.00 puts vs. buying of the USX0 174.00/171.00 put spread.

• JGB futures were bid at the Tokyo open, aided by soft local corporate earnings and CapEx data, with perhaps an element of overnight catchup in the mix. The latest round of 10-Year JGB supply was on the weaker side as the cover softened, tail widened and low price missed dealer estimates. Indeed, the average price barely topped the low price estimate. Still Futures were choppy around the auction, settling around pre-auction levels in the aftermath, despite the disappointing result. Contract last +12 on the day. Cash trade sees yields unchanged to a touch richer.
• Aussie bonds saw some early steepening, with focus on corporate supply and a lack of month-end support, although XM recovered off worst levels, while the broader space showed little reaction to the extension of the RBA's TFF and latest tweaks in the policy statement. The Bank lefts its cash rate and 3-Year yield targets unchanged, as expected. YM -0.5, XM unchanged.