Narrow Ranges For Core FI, Mostly Lower In Asia

T-Notes have edged away from their early Asia-Pac lows, but have held to a 0-05+ range, to last trade -0-00+ on the day at 136-29+, 0-02+ off worst levels. Light bear steepening remains in play in the cash space, with 30s 1.0bp or so cheaper on the day, while e-minis are higher on the day in the wake of earnings from tech giants Amazon & Alphabet. The space looked through a softer than expected Caixin services PMI print out of China, given the softer than expected Chinese PMI readings already seen in recent days.

• JGB futures -3 vs. yesterday's settlement, holding tight ranges, with the belly seeing some marginal underperformance in cash trade. The BoJ delivered the expected Y50bn cuts to the purchase sizes of both of the 1-3 & 3-5 Year Rinban buckets, which was in line with broader expectations after the adjustments to the relevant purchase bands in the Bank's February Rinban outline. There was little in the way of meaningful movement in the offer/cover ratios, even against lower purchase volumes.
• Aussie bond futures have operated in the ranges established in early Sydney dealing, with RBA Governor Lowe's address largely reaffirming knowns. The major point of note saw Lowe state that "later in the year, the Board will need to consider whether to shift the focus of the yield target from the April 2024 bond to November 2024 bond. In considering this issue the Board will be giving close attention to the flow of economic data and the outlooks for inflation and jobs. It has made no decision yet." The idea that the RBA's 3-Year yield target may roll forwards at some point in 2021 had been discussed by several analysts in recent days/weeks and gained further traction after the RBA's inclusion of explicit calendar guidance in yesterday's statement. The space ultimately showed little reaction to Lowe's comments, YM +0.5 and XM -2.5 at typing, with the weakness in the longer end stemming from the trans-Tasman impetus in the wake of a stronger than expected NZ labour market report. On the semi front, NSW TCorp launched a benchmark tap of its Mar '33 line, which should price on or before tomorrow.