Tsys Soften At Reopen, JGBs Rise As Tokyo Mulls State Of Emergency

T-Notes last seen -0-05+ at 137-29. The contract re-opened lower and has extended losses since, even as e-minis have turned red. U.S. coronavirus headlines have been eyed, with Dr Fauci signalling that the national vaccination programme is picking up speed. Cash Tsy curve has bear steepened at the start to the week, yields last sit 0.2-2.7bp cheaper. Eurodollar futures trade unch. to -0.5 tick through the reds.

• Conversely, JGB futures have picked up a light bid and last trade at 151.97, 5 ticks above last settlement & off session high of 151.99. The contract has drawn support from local press reports suggesting that Japan's central gov't could impose a state of emergency in the Tokyo region as soon as this week, after a request from Tokyo Gov Koike & Governors of three neighbouring prefectures. The Nikkei reported that PM Suga will outline strategy on fighting the latest Covid-19 outbreak during a presser scheduled at the top of the hour. Cash JGB yields sit a touch lower, with 40s outperforming.
• Australian YM trades -0.5 & XM sits -2.0 after losing some altitude. Cash ACGB curve has steepened, yields last seen -0.4bp to +2.3bp. Bills trade -1 to +1 tick through the reds. Coronavirus matters continue to dominate locally, with NSW demanding that its residents wear masks in indoor venues. In local data, CoreLogic House Price Index rose 0.9% M/M in Dec, while the final reading of Australian Dec Markit M'fing PMI was revised to 55.7 from 56.0.