Tracking Core FI Back From Best Levels

The space played catch up to Friday's late NY/Monday's early Asia rallies in core global FI markets at the Tokyo re-open, before pulling back from firmest levels of the day. Futures hit the lunchbreak 16 ticks above settlement levels, 15 ticks shy of their peak, with core FI markets moving away from best levels despite a lack of notable headline flow. The longer end saw some light outperformance in cash trade, with 10-Year JGB yields hovering back around 15bp after a brief showing above 18.0bp on Friday (in turn affording the BoJ some breathing space re: the need to enforce its permitted trading range for 10-Year JGB yields).

• Local headline flow remains light, with the latest round of 3-5 Year BoJ Rinban operations unchanged in terms of purchase size and drawing an offer to cover ratio of 3.20x (prev. 3.65x).