Steepening Impetus Spills Over Into ACGB Space Early On, Core FI Tread Water

T-Notes established themselves comfortably within yesterday's range and last change hands +0-03+ at 133-18, with overnight headline flow providing little in the way of notable catalysts. Cash Tsy curve bull flattened a tad, with yields last seen unch. to -1.1bp. Eurodollar futures run unch. to +1.0 tick through the reds. Preliminary University of Michigan Sentiment provides the sole point of note on the U.S. economic docket today.

• JGB futures traded sideways after a marginally softer reopen. The contract last deals at 152.17, 3 ticks shy of Thursday's settlement. Cash JGB yield curve runs slightly flatter, with the super-long end outperforming. The MOF held a liquidity enhancement auction for off-the-run JGBs with 5-15.5 Years until maturity, drawing bid/cover ratio of 3.104x.
• The AOGM auctioned A$1.2bn of 4.75% 21 Apr '27 Bond, with bid/cover ratio printing at 3.929x (prev. 2.090x). Cash ACGB curve bear steepened early on, having absorbed Thursday's impetus from U.S. Tsy space. Yields last trade 0.2-3.2bp higher across the curve. Aussie bond futures were rangebound; YM trades -0.5 & XM -2.5 at typing. Bills last seen -1 tick through the reds. The latest MNI INSIGHT piece noted that the RBA could begin to revise its baseline forecasts if the current lockdowns continue into 4Q2021. Meanwhile, NSW declared another record daily Covid-19 case count, while Canberra identified two further infections.