T-Notes Fade Initial Uptick, Vaccine News In Focus

The news that AstraZeneca's promising Covid-19 vaccine trial has been halted due to the detection of an unexplained illness in one of the participants pushed T-Notes higher after the re-open. With the broader defensive feel amplified by Brexit concerns and flaring Sino-U.S. tensions, the contract topped out at 139-20 before ebbing off highs amid a broader unwinding of the early risk aversion. T-Notes stabilised around their present levels and last trade +0-02+ at 139-15. Cash Tsy curve has bull flattened, with yields sitting unch. to +1.6bp as we type. Eurodollars trade unch. to -0.5 tick through the reds.

• JGB futures wavered while being biased marginally higher and last trade at 151.97, 13 ticks above settlement, as Wall St. equity rout spilled over into Asia. Cash JGB curve flattened. The local economic docket was very light today.
• Aussie bond futures acted on the broader bull flattening dynamics, as the space reacted to the vaccine news. Accordingly, cash ACGB curve runs flatter, sits lower. Bills trade -1 to +1 tick through the reds. The space ignored above-forecast housing finance data and a jump in Westpac Consumer Confidence. The RBA offered to buy a cumulative A$2.0bn worth of ACGBs (eligible maturities: Apr '23 & Apr '24).