Tight Ranges For Core FI, ACGB Front End Bid On COVID Matters

News flow and broader market flow was generally light in Asia. T-Notes have stuck to a 0-02+ range, last +0-02+ at 131-30, while cash Tsys trade unchanged to ~0.5bp cheaper across the curve at typing. A recently published FT interview with Boston Fed President Rosengren saw him issuea warning that "the U.S. cannot afford a "boom and bust cycle" in the housing market that would threaten financial stability, in a sign of growing concern over rising property prices at the central bank."

• JGB trade was relatively muted, with futures 6 ticks below Tokyo settlement levels at typing, adding to the modest overnight session dip, while the major cash benchmarks trade little changed to 1.0bp cheaper across the curve. An uptick in the cover ratio witnessed at the latest round of 25+ Year BoJ Rinban ops applied some marginal pressure to the longer end during the Tokyo afternoon. News flow was light, with the summary of the latest BoJ monetary policy revealing nothing in the way of surprises, while PM Suga pointed to the government's "high alert" re: the slight rise in Tokyo's COVID case count, while underlining the government's desire to implement a nimble response to the virus.
• The local COVID situation supported the front end of the Australian bond futures curve in early trade this week, leaving YM +2.5 and XM -2.5 at typing, as the former unwound its modest overnight cheapening and more. Cash ACGB trade has also seen some twist steepening, with 3s representing the firmest point on the curve, while the long end has cheapened by ~2.5bp vs. Friday's closing levels. As a reminder, the weekend saw the scope of Sydney's lockdown broadened to cover the entire Sydney area, with the length of the lockdown increased to 2 weeks. Elsewhere, the city of Darwin implemented a "hard" two-day stay-at-home order after the discovery of a handful of COVID cases.