Long-End Supply Headlines In Asia, Tsys Rangebound Ahead Of U.S. CPI

Thin headline flow in Asia-Pac hours allowed participants to focus on today's U.S. CPI data, set to receive additional scrutiny after the latest rounds of Fedspeak fanned taper expectations. Adding to hawkish musings of his colleagues, Chicago Fed Pres Evans said Tuesday that he expects "substantial progress" towards tapering asset purchases later this year. The air of expectancy dominated, keeping T-Notes within a tight 0-02+ range, with the contract sitting -0-02+ at 133-15 as we type. Cash Tsy yields last trade a touch higher across the marginally steepened curve. Eurodollars are unch. to +1.0. There is more Fedspeak coming up today, with Bostic, George and Logan all due to speak. On the supply front, there is a 10-Year Tsy auction coming up today.

• Japanese MoF sold 30-Year JGBs, drawing bid/cover ratio of 3.07x (prev. 3.63x, highest since Nov 2020), with tail widening to 0.11 (prev. 0.03, tightest since May 2019) and low price matching BBG forecast. The offering had no material impact on JGB space and cash yields continued to sit marginally higher, with 10s underperforming. JGB futures were slightly heavy and slid to fresh one-month lows. The contract trades at 152.04, 10 ticks below last settlement.
• The AOFM auctioned A$300mn of the 3.25% 21 Jun '39 Bond, tapping it for the first time since Oct 2020. Cash ACGB curve remained bear-steepened, albeit 10s lagged. Aussie bond futures held narrow ranges, with YM last trading -1.0 & XM -2.5. Bills sit unch. to -1 tick through the reds. The local Covid-19 outbreak continued to provide interest, with a 4.4% monthly decline in Westpac Consumer Confidence reflecting the impact of restrictions on sentiment. Australia-U.S. 10-Year yield spread tightened further, reaching levels not seen since Mar 2020.