RBA Pre-Announces QE Extension, Supports Core FI

U.S. Tsys traded unchanged to lower during the bulk of Asia-Pac hours, with the PBoC's latest round of liquidity injections and a message from China's chief diplomat, Yang Jiechi, pointing to the potential for a more constructive Sino-U.S. relationship, albeit with the usual caveats surrounding well defined flash points, seemingly supporting broader risk appetite. Elsewhere, some took solace from after-hours losses for U.S. retail favourite equity name GME. T-Notes trading -0-00+ at 137-05+ last, with the spillover from the latest RBA decision seeing the contract away from lows, although the contract has stuck to a 0-03+ range. Cash little changed across the curve, with a very marginal degree of twist steepening seen.

• JGBs were unchanged to higher for the bulk of Tokyo trade, with futures last +3, a touch shy of best levels, which came on the back of the RBA decision and in the wake of a 10-Year JGB auction which was a little firmer than exp./prev., but was still relatively soft in the grand scheme of things. Cash JGBs were a touch firmer across the curve, with swap spreads generally a little wider on the day.
• Aussie bonds were softer into the first RBA decision of '21, but the RBA's pre-announcement of A$100bn worth of bond purchases, which will run at the same rate as the current scheme when it runs dry in mid-April, caught markets off guard owing to its timing (the size of the new scheme was in line with broader exp.). The rhetoric surrounding the Bank's economic projections was a little more upbeat (as expected), but wasn't a gamechanger.