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T-Notes Head Lower As Risk Aversion Eases

BOND SUMMARY

T-Notes have edged lower in a correction of their rally seen in Thursday's U.S. hours. With e-minis ticking higher since the Asia re-open, T-Notes last trade -0-02 at 139-12. Cash Tsy curve has bear steepened, with yields sitting 0.2-1.2bp higher. Eurodollar futures are unch. to +0.5 tick through the reds. Little to pin those moves on, apart from easing risk aversion.

  • JGB futures started on a firmer footing, moving past overnight highs, but have ebbed off highs (152.03) since and last trade at 151.96, just 2 ticks above settlement. The super-long end of cash JGB curve outperforms. Japanese PPI matched estimates, while the MoF's Business Survey showed a more dynamic recovery than expected. The BoJ left the sizes of its 1-10 Year JGB purchases unchanged.
  • Turning to Australia, YM nearly unch. & XM +2.4 as we type, the latter has faded its earlier uptick. Cash ACGB curve runs flatter, yields sit +0.2bp to -2.9bp. Bills trade unch. to -1 tick through the reds. Nothing of note in Australia's economic docket today.

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