Lingering Risk Aversion Supports Core FI

Broader defensive feel has carried over into the Asia-Pac session, as latest headline flow has lacked any notable fresh catalysts. A sense of concern surrounding China's property market might be playing a role as well, after Fitch downgraded Evergrande & Kaisa to "restricted default."

• T-Notes have crept higher from the off and last trade -0-00+ at 130-12, still some way from yesterday's peak at 130-17+. Cash Tsy curve has bull flattened a tad, with yields last seen +0.2bp to -1.4bp. November CPI data headline the local docket today, with FOMC members already in their blackout period ahead of next Wednesday's meeting. Eurodollar futures trade up to -1.5 tick through the reds.
• JGB futures advanced, topped out at 152.13 and trimmed gains. The contract last changes hands at 152.10, 7 ticks above previous settlement. Cash JGB yields sit marginally lower across the curve. Larger than expected acceleration in Japanese PPI provoked no material market reaction.
• Aussie bond futures have gone bid, YM last +5.0 & XM +4.7. Cash ACGB yields trade lower across the curve, last 0.2-5.3bp below neutral levels. Bills run unch. to 6 ticks higher through the reds. There was no AOFM issuance slate today, as ACGB issuance for 2021 has ended.