Limited Ranges For Core FI In Asia, Minor Reactions To Biden-Xi Call

The U.S. Tsy space is still relatively unmoved given the lack of clear, positive progress in a Biden-Xi phone call, with the readouts from both sides only providing the broad brushstrokes of the dialogue. Still, the space has cheapened a little on the prospect of increased direct dialogue between the two Presidents, but the moves have been very limited. T-Notes have stuck to a 0-03 range during Asia-Pac dealing, last trading -0-02 at 133-14. Cash Tsys run unchanged to ~1.0bp cheaper on the day, with a marginal steepening bias evident. Broader perception surrounding the Biden-Xi call will be eyed in European & U.S. hours. PPI & a couple of addresses from Fed's Mester headline the local docket on Friday.

• A similar pattern to Thursday's Tokyo trade played out this morning, with JGB futures having a brief look above the overnight high early on, before retracing back into the range observed in post-Tokyo trade. That leaves the contract unch. on the day at typing, with domestic equities ticking higher. Cash JGBs run little changed to 1.0bp richer across the curve, aided by Thursday's richening in U.S. Tsys. Headline flow has been light, with the pricing of Softbank's Y450bn round of subordinated debt issuance getting most of the attention.
• In Australia, the AOFM switched its weekly issuance schedule up a little and will only offer one round of conventional ACGB coupon issuance next week. This will be in the form of A$1.5bn of the ACGB April '33, a slightly longer bond than "normal" with a slightly larger notional on offer vs. the norm in a single auction in recent weeks. Still, the negative RBA purchase-adjusted net issuance dynamic remains well and truly in place. Futures roll activity has dominated (sellers continue to drive activity in both YM & XM rolls), with corporate A$ supply continuing to tick over. YM +2.2 & XM +3.5 after both contracts were better bid in the overnight session. Cash ACGB trade sees the longer end of the curve run ~4.5bp richer on the day, with some bull flattening in play, once again aided by Thursday's move in U.S. Tsys.