Reflation Narrative Reverberates Around Asia

Monday's Asia-Pac trade was all about the continuation of the reflation narrative, with sizeable enough core FI market movements seen in the timezone, especially when you consider the lower liquidity backdrop owing to the Lunar New Year & U.S. Presidents Day holidays. The Nikkei 225 moved above 30,000 for the first time in decades, while the 3 major e-mini contracts tagged new all-time highs.

• T-Notes ran through Friday's late lows, with the contract last printing -0-11 at 136-06+ on healthy volume of ~160K. A reminder that cash Tsys will not be open until Tuesday's Asia-Pac session, with the aforementioned Presidents Day holiday in play.
• JGBs struggled, with futures extending on the weakness seen in the final overnight session of last week, last -16, with the curve marginally steeper, aided by long end payside flow in the swap space, with swap spreads comfortably wider on the day as a result. The sizes of BoJ Rinban operations covering 1-10 Year JGBs were left unchanged, with little of any real note in terms of offer/cover ratios witnessed within the details.
• Aussie bonds were no exception to the broader rule, YM -1.0, XM -9.0, with a sub 3.00x cover ratio witnessed in the latest round of longer dated AOFM supply, as the average yield only printed ~0.1bp through mids, while the supply saw a wider tail vs. the last time the bond was tapped via auction (which was back in '19).