Risk Appetite Limits Core FI, JGB & ACGB Supply Well Received

The broader risk-on feel, spilling over from NY hours, before building on the back of warm enough tones surrounding the Sino-U.S. phase 1 trade deal phone call, only applied limited pressure to the U.S. Tsy space in overnight trade. A ~10.0K screen seller of T-Notes helped the contract to worst levels, although the broader range was generally contained. The downside focus was also seen elsewhere, with a 5.3K block buyer of the TYV0 137.00 puts seen. FV & TY roll activity was also observed. T-Notes last -0-04 at 139-12+, holding a 0-04+ range, while cash yields sit 0.3-1.0bp cheaper across the curve.

• JGB futures held to a tight range, unwinding the early dip lower to last trade -5 on the day. The wings of the JGB curve outperformed in cash trade, with the long end firming further in the wake of a solid round of 20-Year supply (see earlier bullets for details).
• Light steepening held in the Aussie Bond space, YM -0.5, XM -2.5, even with the latter moving away from worst levels. The flash trade balance release and ABS payrolls data provided no real impetus for the space, while the latest round of weekly ANZ consumer confidence data saw an uptick. The launch of ACGB Nov '31 garnered most of the interest, with the bookbuild already said to be in excess of A$44bn.