Off Highs, Futures Still Above Settlement, Curve Marginally Flatter

There has been a lack of domestic input when it comes to this morning’s market moves, with wider cross-asset flows at the fore. The early bout of risk-off flows linked to COVID headlines covering the Chinese city of Shanghai & North Korea, and perhaps some worry linked to the Chinese property sector given Sunac’s warning re: its ability to service its immediate interest payment on debt requirements, provided some support, before the wider risk-off impulse faded.

• As a result, JGB futures pushed through their overnight highs before fading from best levels, hitting the lunch bell +6 vs. yesterday’s settlement levels.
• The cash JGB space sees the major benchmarks operate little changed to ~1bp richer, with 30s providing the firmest point of the curve, even ahead of the impending round of 30-Year JGB supply, which headlines the domestic docket this afternoon.