Plenty To Talk About

T-Notes are trading back through their Thursday lows after some post-Powell (confined) chop in Asia, with some certainty re: the direction of Chinese macro policy seemingly allowing equity markets to move off of their lows and the DXY to move away from highs. T-Notes last -0-06 at 132-06+, while the cash curve bear steepens, with 30s sitting ~2.0bp cheaper on the day.

• JGB futures turned well bid in early afternoon trade after BoJ Governor Kuroda expressed no desire for a widening of the permitted 10-Year JGB yield trading band during the lunchbreak, pushing back against some of the speculation surrounding the ongoing BoJ monetary policy review. The contract last trades +30 on the day, 9 ticks off highs, fully reversing the overnight losses and more. The long end of the curve now outperforms, with bull flattening in play post-Kuroda (twist steepening was evident in morning trade).
• The Aussie bond complex has managed to shake off the impact of some weakness in U.S. Tsys, a lack of off-schedule RBA ACGB purchases and a less than inspiring round of ACGB supply, and was already recovering by the time the AOFM revealed a particularly light weekly issuance slate (see earlier bullet for full details), which provided some further momentum to the bid from lows. There may have also been some trans-Tasman impetus around the time of the release of the AOFM's weekly issuance schedule, as the RBNZ lifted its NZGB LSAP purchase target for next week. Still, the long end lags on the back of the overnight spill over from U.S. Tsys leaving YM +1.5 & XM -5.0 ahead of the close.