TY Put Blocks Headline Narrow Asia-Pac Session For Core FI

Wednesday's pre-Lunar New Year Asia-Pacific session was devoid of any meaningful macro headline flow, with focus on the PBoC's latest net drain via OMOs as we move into the LNY break (physical cash demand is expected to be much lower than the holiday norm in China, given the COVID related travel restrictions that are in place in the country at present).

• That backdrop left T-Notes to operate within the confines of a 0-03 range, last -0-00+ at 136-22+, with cash Tsys little changed across the curve. The highlight came via a large TY options block, which initially looked like a 15.0K sale of the TYH1 136.25 puts & 30.0K sale of the TYH1 136.00 puts against buying 10.0K of the 3x1x2 TYJ1 134.50/133.50/133.00 put ladder. However, some have suggested that the blocks represented a 15.0K seller of the 1x2 TYH1 136.25/136.00 put spread against buying 10.0K of the TYJ1 134.50/133.50 put spread & 20.0K of the TYJ1 134.50/133.00 put spread.
• JGB futures are looking to extend on the recent run of weakness (the longest stretch of daily losses going back to '03 has already been realised), with some swap spread widening and modest cheapening evident across most of the JGB curve ahead of the Tokyo close. Futures last -2 after surrendering overnight gains.
• Wednesday provided a particularly narrow round of Sydney trade for the longer end of the Aussie curve, YM -0.5 and XM +0.5 at typing. ACGB Nov '31 supply was easily digested, while the uptick in the latest Australian Westpac consumer confidence reading took the metric back towards the multi-year highs witnessed in December's print.