Tsys Underperform In Asia Ahead Of 30-Year Supply

E-minis have ticked higher during Asia-Pac hours. The moves are limited in terms of the broader picture, but are managing to keep some light bear steepening of U.S. Tsys in play in the wake of the passage of the U.S. COVID relief Bill and ahead of today's 30-Year Tsy supply. T-Notes sticking to a very narrow 0-03 range thus far, last -0-01 at 132-16, with 30s still providing the weak point on the cash curve, trading ~2.0bp cheaper on the day at typing. No impact on the broader Tsy space as Verizon kicked off a jumbo 7-tranche round of issuance.

• Richening in the long end of the cash curve supported JGB markets in the Tokyo morning. The smooth enough absorption of 20-Year JGB supply allowed the bid to develop during the early part of the Tokyo afternoon, with 30- & 40-Year paper now running ~4bp richer on the day, while swaps have generally widened vs. JGBs across the curve. Futures last +5, unwinding their overnight weakness and more. Local headline flow has been extremely limited to non-existent, with the latest round of weekly international security flow data revealing ~Y750bn of net purchases of Japanese paper by foreign investors (which partially unwinds the large net selling seen in the previous week and coincides with the short-term top in JGB yields).
• Roll flow continues to dominate in Sydney, with no tangible reaction in Aussie bonds to the latest round of fiscal support for the Australian economy (it does pale in comparison to previous rounds of support). The RBA provided its standard scheduled round of ACGB purchases. YM +1.4 & XM +4.0 ahead of the close, with Aussie 10s continuing to narrow vs. their U.S. counterpart in the wake of yesterday's address from RBA Governor Lowe.