T-Notes Move Away From Tuesday Lows, Aussie Bonds Shake Off Initial Weakness

T-Notes have been chewing into Tuesday losses and last trade -0-00+ at 135-24+, with all three e-mini contracts headed lower, extending correction of yesterday's rally to fresh all-time highs. Cash Tsy curve runs flatter, yields are 0.2-1.7bp richer. Eurodollar futures run unch. through the reds. FOMC meeting minutes will take focus in the U.S. today, alongside the release of retail sales, industrial output & PPI.

• JGB futures have wavered within a tight range and now trade at 151.34, 17 ticks shy of last settlement. Cash JGB yields sit higher across the curve, with belly underperforming. The Nikkei 225 has softened after showing at multi-decade highs on Tuesday. The local data docket was headlined by Japan's trade report & core machine orders. Jan trade deficit was narrower than expected, on the back of misses in both exports & imports, while core machine orders staged a surprise rebound in Dec.
• Australian YM trades -1.5, while XM operates -7.5, recouping its initial dip. Cash ACGB curve has bear steepened, yields sit 0.6-7.8bp higher. Bills trade 1-3 ticks lower through the reds. The AOFM tapped A$1.5bn of ACGB 1.00% 21 Dec 2030, while the RBA offered to buy A$1.0bn of semi-gov't bonds with maturities of Mar '25 - May '28, excluding TCV Nov '25. RBA Asst Gov Kent have centred around the impact of measures taken by the Reserve Bank on AUD.