Tsys Away From Early Asia Lows

5-Year cash Tsy yields printed at the highest level witnessed since the onset of the COVID outbreak at the re-open, as participants reacted to the continued drift lower in futures on Thursday (when cash markets were closed owing to the observance of the Veterans Day holiday). The space then retraced from intraday cheaps, with little in the way of meaningful headline flow observed. That left cash Tsys little changed to 2.5bp cheaper across the curve, with the impetus from post-CPI repricing of Fed expectations continuing to weigh on the belly of the curve, which provided the weak point. TYZ1 last +0-07 at 130-17+, representing best levels of the day. JOLTS job openings data and the latest UoM sentiment survey provide the focal points of Friday's domestic docket, while the latest round of comments from NY Fed President Williams will hit (topic: heterogeneity in macroeconomics).

• JGB futures struggled to gather any upward impetus, even as Tsys recovered from worst levels, perhaps owing to the bid in domestic equity markets on the latest leg of JPY weakness. That leaves futures 14 ticks softer ahead of the close. Cash JGBs were mixed across the curve, with no notable deviation from Thursday's closing levels.
• ACGBs showed no reaction to a nominal uptick in the amount of ACGB issuance on offer next week, given the fact that an uptick of a cumulative A$500mn notional on offer across the two ACGB auctions will be more than digestible in DV01 terms (see earlier bullet for more detail on next week's AOFM issuance plans). Fairly sedate trade was witnessed in Sydney, with nothing in the way of notable macro headline flow observed. YM -2.0 & XM +2.0 at the close as a result. The longer end of the cash ACGB curve was ~7bp firmer on the day, with the bid in the longer end developing into the close, aided by the uptick from lows in U.S. Tsys (although there was some clear outperformance for long Aussie paper here, without clear reasoning). EFPs were a little wider on the day.