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Plenty To Note Moving Into The Weekend

BOND SUMMARY

The latest fiscal headlines from the U.S. pointing to an agreement between a bipartisan group of Senators re: infrastructure have done little for the market, with the blessing of both party leaderships still required and questions from the White House emerging (although the latter has expressed a willingness to work with the group). T-Notes have stuck to a 0-04 range overnight dealing just off of best levels at typing, last +0-04+ at 133-02+ on decent enough volume of just over 103K, with cash Tsys trading roughly 0.5-1.0bp cheaper across the curve. Flow was headlined by a 5.0K block seller of FVU1.

  • JGB futures have built on their overnight rally but trade a little off of best levels, with JBM1 now trading +15 on the day. Cash JGBs have richened across the curve, with focus on the offshore market impetus and then the local spill over. The 5- to 10-Year sector outperforms, richening by a little over 2.0bp, with 10-Year yields moving decisively below 5bp for the first time since late January. Long end swap spread tightening has been evident for a second day, with signs of foreign receiving showing up in the JSCC/LCH basis for 30-Year swaps. Broader news flow remains light. Locally, speculation in the local press re: spectators at the Olympics continues to do the rounds, while the latest quarterly BSI survey failed to impact markets.
  • Outside of an early blip lower at the Sydney re-open there has been little to note for the Aussie bond space, with the tail end of the futures rolls taking most of the focus ahead of an elongated weekend. YM -0.4, XM +0.3 at typing, while cash ACGB trade sees the major benchmark yields trade either side of unchanged across the curve. The release of the latest weekly AOFM issuance slate threw up nothing in the way of notable surprises. Participants are already looking to several key risk events slated for next week, namely the release of the RBA's June meeting minutes, the latest labour market report and an address from RBA Governor Lowe (titled "From Recovery to Expansion").
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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