Tight Start

U.S. Pres Biden signed the short-term statutory debt ceiling increase into law, but markets have been unfazed by this widely expected development. Elsewhere, regional macro headline flow has been relatively thin, offering little to rock the boat.

• T-Notes are off to a slow start, they have held a very tight range so far and last trade -0-00+ at 131-15+. Cash curve has steepened marginally, signalling the dissipation of yesterday's flattening impetus. Yields last trade unch. to +1.0bp across the curve. Eurodollar futures sit unch. to 1.5 tick lower through the reds. The U.S. economic docket for today features retail sales, Empir M'fing, Uni. of Mich. Sentiment and Fedspeak from Williams & Bullard.
• JGB futures tested overnight highs while oscillating within a narrow range. The contract last sits at 151.48, 11 ticks above Thursday's settlement. Cash JGB yields are marginally mixed. PM Kishida dissolved the House of Representatives ahead of the Oct 31 general election and is set to outline his government's plan for Covid recovery today.
• The AOFM's auction for A$1.0bn of ACGB Apr '26 attracted strong demand, as bid/cover ratio printed at 7.52x (prev. 6.15x). Aussie bond futures have been unfazed, YM last sits +0.5 & XM +1.0, both have been rangebound. Cash ACGB curve has generally flattened, albeit the belly outperforms, with yields last seen unch. to -1.5bp. Bills trade -1 to +1 tick through the reds. On the news front, NSW announced they will scrap quarantine mandate for vaccinated travellers from Nov 1. As a reminder, the AOFM will release their weekly issuance schedule at the top of the hour.