Some RBNZ Inspired Chop Livens Up A Limited Session

U.S. Tsys have softened a touch in Asia, with the major cash benchmarks running little changed to 1.0bp cheaper ahead of European hours. There has been a lack of tier 1 macro news flow, but e-minis managed to unwind their early, modest losses to print higher on the day, while some spill over from the latest RBNZ decision was also observed. T-Notes last trade -0-03+ at 134-05, within the confines of a 0-06 range. Flow in the space was headlined by a 10K block buyer of the TYU1 135.00 calls. NY hours will see the release of the minutes from the FOMC's latest monetary policy decision, comments from St. Louis Fed President Bullard ('22 voter), building permits & housing starts data and 20-Year Tsy supply.

• For Aussie bonds most of the focus was on goings on across the Tasman. The space saw some initial, modest support as the RBNZ left its OCR unchanged in light of the recent COVID developments in NZ, before moving lower as the market reacted to the Bank's focus on a modest delay to the start of its hiking cycle. YM unch., XM -0.5 at typing. In terms of local matters, the Q2 wage price index provided a slight miss vs. exp., while the latest round of ACGB Jun '31 supply was easily digested, with the cover ratio in the mid 3s and weighted average yield printing 0.45bp through prevailing mids at the time of supply.
• JGB futures last print 4 ticks lower on the day, hugging a tight range with a lack of idiosyncratic news flow evident. The major cash JGB benchmarks trade either side of unchanged, but within -/+0.5bp boundaries. The offer/cover ratios witnessed in the latest round of 1- to 10-Year BoJ Rinban operations were little changed to a touch lower vs. the previous operations for the respective buckets.