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T-Notes Probe Water Under Tuesday Low, Debt Supply In Focus

BONDS

A downtick at the re-open of cash trading allowed T-Notes to test the water below Tuesday's worst levels. TYH2 last changes hands -0-04 at 127-08, hovering above the session low of 127-06, which also represents a new cycle trough. Eurodollar futures are unch. to -2.0 ticks through the reds. Cash Tsy curve runs slightly flatter, with yields last seen 0.4-1.1bp higher. Wednesday's U.S. data highlights include housing starts & building permits, with a 20-year auction providing the focal point on the supply front.

  • JGB futures slipped in early trade, before clawing back losses, with yesterday's BoJ developments already in the books. The contract sits at 150.80 at typing, 6 ticks above last settlement and 8 ticks above session low. Cash JGB curve runs slightly steeper, albeit only marginally. An auction for 1-year Bills and a liquidity enhancement auction for off-the-run 1-5 Year JGBs headline the local docket today.
  • Aussie bond futures have been rangebound, YM -2.0 & XM -5.5 at typing. Bills trade 1-3 ticks through the reds. Cash ACGB yields sit 1.0-5.5bp higher across a steeper curve, with the benchmark 3-year yield pushing further above the 1.6% mark & 10-year yield crossing above 2.0% for the first time since Oct. The AOFM auctioned A$500mn of the ACGB Jun '35, drawing a bid to cover ratio of 2.25x.

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