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T-Notes Rangebound, JGBs Tick Higher, ACGBs Slip


Eyes are on negotiations on the Hill, after Senate Republican leader McConnell offered Democrats a deal to raise the debt ceiling and kick the default can further down the road. McConnell said that he couldn't predict if the deal would be struck tonight, but flagged potential for a vote on Thursday. T-Notes have been impervious to the latest headline flow and have held a tight 0-02+ range so far. The contract last sits -0-01+ at 131-21+. Cash Tsy curve has bear steepened, albeit only marginally. Eurodollar futures trade +0.5 to -1.0 tick through the reds.

  • Participants await BoJ Gov Kuroda's address to the branch managers' meeting due at the top of the hour. JGB futures have edged higher and last trade at 151.41, 11 ticks above previous settlement. Cash JGB yields sit a tad lower across the curve. On the supply front, the MOF will conduct a 5- to 15.5-Year liquidity enhancement auction covering off-the-run JGBs.
  • Cash ACGB curve has twist flattened as Sydney trade got underway, yields last sit +3.2bp to -3.3bp. Futures have retreated in early trade, YM last seen -3.0 & XM +2.0. Bills run 2-4 ticks lower through the reds. The RBA offered to buy A$1.6bn of ACGBs with maturities of Apr '29 to Nov'32, excluding ACGB Nov '32.

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