Off Monday's Lows, But Not Firm

Monday's sharp cheapening has perhaps allowed regional Asia-Pac participants to adopt a buy the dip mentality, while the lack of a smooth transition trajectory on the back of the U.S. election is aiding that theme. T-Notes +0-07 at 137-25+ as a result, more mid-range on the session now, while e-minis tick lower, with the cash Tsy curve bull flattening, running unchanged to 2.2bp richer across the curve. T-Notes operate on above average volume, with over 175K lots changing hands thus far.

• JGB futures edged further away from the overnight lows at the Tokyo re-open, before sticking to a very narrow range through the morning session as participants assessed the overnight market news and looked ahead to this afternoon's 30-Year JGB supply. A solid 30-Year JGB auction provided some upwards momentum in early afternoon trade, with the aforementioned relative and outright demand factors evident ahead of supply. The low price topped dealer expectations (98.80 per the BBG poll), with the cover ratio moving higher and tail narrowing vs. the previous auction. Still, that dynamic quickly unwound. Futures sit ~30 ticks below settlement levels, with 7s underperforming in cash trade. Swap spreads were mixed, with the most notable moves coming in the long end, with 30- & 40-Year swaps widening,
• Pricing of A$ issuance in the form of Queensland's new '31 green bond and the World Bank's dual tranche 5- & 10-Year is kept Aussie bonds in check, after the sizable overnight moves for futures. Japan's Shizuoka prefecture has also bought 10-Year A$ paper to market. YM -2.0, with XM -15.0, as the latter tests some pretty major support levels. Bills run 1-4 ticks lower through the reds.