Off Best Levels

Core fixed income markets have settled into narrower ranges in recent dealing after a volatile start, with limited headline flow evident as we work our way through Asia-Pac trade. It would seem that the rally in equity markets has taken the edge off of the early bid in core bonds, with U.S. Tsys fading from the highs which came on the early Asia reaction to Friday's NY bid (potentially aided by softer than expected official PMI data out of China hitting over the weekend), while the knee jerk bid in Aussie bonds on the back of the RBA's upsizing of its scheduled ACGB purchases was quickly reversed, with the pullback in longer dated paper extending a little thereafter. Still, YM and XM remain comfortably above settlement levels.