Risk Aversion Dissipates But T-Notes Recoup Initial Downswing

Little to write home on the news front, apart from U.S. President Trump's declaration that he will not extend the deadline for ByteDance to sell its U.S. operations, which provoked little to no market reaction. A dearth of market moving headlines or data releases kept T-Notes wavering within a 0-03+ range overnight. The contract round tripped from a session low of 139-12, with the downswing driven by impetus from equity markets, as e-minis crept higher and the Nikkei 225 recoiled after a lower open. T-Notes recouped losses and last trade flat at 139-14. Cash Tsy yields sit marginally shy of neutral levels across the curve. Eurodollar futures are unchanged to -0.5 tick through the reds. There is no more Tsy supply this week and the main thing to watch in the U.S. today is local CPI data.

• JGB futures pushed higher, though not without brief hiccups. The initial upswing to 152.03 (Thursday's Tokyo high) was faded before the contract jumped with a fresh impetus after the lunch break. It last trades +9 at the aforementioned 152.03 level, testing it to the downside. Cash JGB yields sit lower, with belly underperforming. Japan's PPI printed in line with expectations, while business conditions for large firms improved more than expected, per the MoF's quarterly Business Survey.
• Down under, YM is little changed and XM sits +2.5 as we type, after holding a fairly tight range. Cash ACGB yield curve twist flattened, with yields last seen +0.2bp to -3.0bp. Bills run unchanged to -1 tick through the reds. The AOFM released its issuance schedule and will auction A$2.0bn worth of ACGB 1.5% 21 Jun '31 and A$2.0bn worth of ACGB 21 Nov '24 next week.