Risk-On Dynamics Keep Core FI At Bay

T-Notes turned their tail as Tokyo trade got underway this week and extended their post-NFP losses, albeit Friday's low remained intact. The contract last sits -0-04 at 132-20, after bottoming out at 132-18+, with participants watching upticks in U.S. equity index futures, with S&P 500 e-minis printing fresh record highs. Fed's Kashkari reinforced the broader post-NFP feel over the weekend, as he flagged that domestic labour market remains in a "deep hole" and needs continued aggressive stimulus to recover. Cash Tsy curve bear steepened a tad (yields last unch. to +1.6bp), while Eurodollar futures trade unch. to -2.0 ticks through the reds.

• Selling pressure hit JGB futures in early trade as local players reacted to Friday's NFP report. The contract now trades at 151.38, 6 ticks shy of last settlement. Cash JGB yields were mixed and showed little deviation from neutral levels. The BoJ left its 1-5 Year purchase sizes unchanged, with bid/cover ratios ticking higher vs. the previous round of Rinban ops covering these maturities.
• Cash ACGB yield curve steepened, with yields seen -0.6bp to +3.7bp as we type. YM trades unch., while XM has ground lower and last sits -3.5. Bills are broadly unch. through the reds, with just IRM1 & IRZ1 sitting 1 tick lower apiece. The space faced pressure as Australia's benchmark stock index surged to record highs, which was a function of buoyant commodity prices. The supply of A$1.0bn of ACGB 21 Dec '30 provoked muted mkt reaction, drawing bid/cover ratio of 2.46x (prev. 2.53x). The size of the auction was small by historical standard, with A$1.2bn allotted at the previous offering. Elsewhere, the RBA offered to buy A$2.0bn of ACGBs with maturities of Nov '24 to May '28, excluding Apr '26. Meanwhile, NAB Business Confidence rallied to an all-time high of 32 in Apr from 24 in Mar, with NAB dubbing the results of the survey as "simply stunning."