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Hovering Just Off Monday's Late Cheaps


Climbs Above The 20-Day EMA


Outlook Remains Bearish


Chinese Media Looks To Placate Equity Worry


(U1) Holding Onto Gains

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Broader macro headline flow was light during Asia-Pac hours, allowing T-Notes to settle into a 0-02+ range, last -0-02 at 132-03+, while cash Tsys trade little changed across the curve. Some questions have done the rounds re: the prospect of bipartisan passage of the proposed infrastructure deal, although key Democratic Senator Manchin deemed the use of reconciliation procedures to force the package through as "inevitable."

  • JGB futures sit +2 last, sticking to a tight range during Tokyo dealing. The JGB curve is the exception to the broader rule in terms of the global core FI curves, twist steepening as opposed to twist flattening, with 20+-Year paper cheapening on Friday. It is hard to pin a particular reason to the move. There has been a lack of domestic news flow to focus on, outside of the flat prints across all 3 major Tokyo CPI readings, with that outcome a touch firmer than expected.
  • The overnight twist flattening of the Aussie futures curve extended a little in Sydney, although that particular extension is back from the day's extremes, with YM -2.5 and XM +1.0 at typing. The front end of the curve (including Bills) was seemingly subjected to some trans-Tasman pressure after ANZ maintained their call for a Feb '22 hike from the RBNZ, but highlighted "that the balance of potential policy regrets has firmly tilted, with the risk being we'll see a higher OCR before the year is out." There was no reaction in futures to the announcement of a rare tap of a long bond (ACGB Jun '51) via auction in the AOFM's weekly issuance slate, while the space also shrugged off a lockdown order covering 4 areas of Sydney (the lockdown will last for at least a week).