T-Notes Rangebound, JGB & Aussie Bond Futures Grind Lower

Marginal bear steepening hit cash Tsy curve in early Asia-Pac trade, yields last sit 0.3-0.9bp cheaper amid little in the way of fresh macro flow. T-Notes trade -0-01+ at 136-27, holding a tight range. Eurodollar futures trade unch. to +0.5 tick through the reds.

• JGB futures has been offered from the off and last trade at 151.83, 15 ticks shy of settlement. Cash JGB yields are mixed across the curve, with the super-long end underperforming. Local news flow has centred around scenarios for holding/cancelling the Tokyo Olympics this year. On the data front, deflation of Japanese consumer prices accelerated in Dec (albeit slightly less than exp.), while the m'fing sector returned into contraction, per flash Jibun Bank M'fing PMI survey. There's a liquidity enhancement auction for off-the-run JGBS with 1-5 years to maturity coming up today.
• Australian YM trades -1.0 & XM sits -6.5 at typing. Cash ACGB curve has undergone bear steepening, with yields last seen 0.1-9.9bp higher. Bills trade unch. to -2 ticks through the reds. An improvement in flash Markit M'fing PMI was coupled with a deterioration in flash Markit Services PMI, although both printed in expansion. Meanwhile, retail sales fell more than exp. in Dec, per preliminary data. The AOFM released its weekly issuance slate (see earlier bullets for details).