Tight Ranges In Asia, Very Modest Pressure For Core FI

Cash Tsys sit 0.5-1.5bp cheaper across the curve, while T-Notes print -0-02+ at 134-04+, operating within a 0-03 range in Asia. Headline and market flow remain light, with a couple of pockets of TY futures sales witnessed since the re-open. The uptick in e-minis and the major Asia-Pac equity indices is applying some modest pressure to the space. Looking ahead to the NY docket, we will see the latest round of new home sales data, the Richmond Fed manufacturing index reading & 2-Year Tsy supply.

• JGB futures last +1, back from overnight session highs, with similar moves witnessed in the respective U.S. & Australian bond futures contracts. Cash JGB trade sees the major benchmarks running unchanged to ~0.5bp richer across the curve. News flow remains sparse, with the local COVID and political situations still dominating there. The latest round of 5-Year supply wasn't the firmest, with the pricing side disappointing. A lack of outright and relative value attraction at present likely hampered the auction. The average price seen at the auction only just met the broader expectations for the low price (as proxied by the BBG dealer poll), although the cover ratio nudged incrementally higher.
• Over in Australia YM & XM held to tight ranges albeit with a steepening bias, with the former -1.5 and the latter -3.0. Cash ACGB trade sees the longer end of the curve running ~4.0bp cheaper on the day at typing. The latest round of daily COVID case counts out of NSW & Victoria saw a slight moderation, but the numbers remain elevated (the NSW Premier has pointed to some form of additional freedom for those that are double vaccinated, with an announcement on the matter set to come towards the end of this week). Participants are still on the lookout for the pricing of the syndication of the new 0.25% 21 November 2032 Treasury Indexed Bond from the AOFM.