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T-Notes Stay On Softer Footing Even As BoJ Comes To Rescue


Selling pressure hit T-Notes as trading got underway in Asia, with the contract extending its pullback from Thursday's peak (116-21). Recovery in U.S. e-mini futures was deemed risk-supportive, sapping strength the Treasuries.

  • The slide in T-Notes was stopped by the BoJ, who announced their monetary policy decision. Despite the market testing the resolve of Japan's central bank over the past week, officials stood the course and stuck with their super-loose policy settings, familiar forward guidance and assessment of the economy, although they tipped hat to the need to watch financial and FX markets. Resultant bounce in JGB futures supported T-Notes, which moved away from their session low of 115-28+.
  • TYU2 last trades +0-13 at 116-07, while Eurodollar futures run 1.5-5.0 ticks higher through the reds. Cash curve bear flattened in Tokyo trade, with yields last 4.4-6.2bp higher. The spread between 5-/30-Year Tsy yields moved towards zero, but lacked the impetus to turn positive.
  • Looking ahead, Fed Chair Powell will speak at the Dollar Conference today, while local data highlights are limited to industrial output.

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