U.S. Tsys Turn Bid On Chinese Growth Angst, ACGBs & JGBs Limited

After a limited start T-Notes managed to extend to fresh session highs, presumably on some worry surrounding the Chinese growth trajectory in the wake of softer than expected Chinese m'fing PMI releases (and subsequent expectations for the prospect of further policy easing), with softer oil prices also lending a helping hand. The contract last prints +0-05+ at 134-20, 0-01 shy of best levels on volume of ~92K. Technical resistance is located at the 20 July high/bull trigger (135-07). Light twist steepening of the curve is evident, with 5s leading the richening (last ~1.0bp firmer), while 20s and 30s now print a little off of their intraday cheaps (~0.5bp cheaper on the day last). There hasn't been much in the way of notable market flow to comment on. The latest ISM m'fing survey print will headline during NY hours.

• JGB futures have stuck to a narrow range, after showing below the late overnight lows in early Tokyo trade, before edging away from worst levels to last trade unch. on the day. The major cash JGB benchmarks are little changed out to 7s, with 10+-Year JGBs richening by 0.5-1.0bp as of typing. Idiosyncratic headline flow remains light, with most of the focus falling on the Japanese vaccine scheme. 10-Year JGB supply & Tokyo CPI data headline Tuesday's local docket.
• Thinner market conditions owing to the NSW holiday (cash ACGBs closed) continue to limit broader Aussie bond futures activity, and therefore the willingness/ability of futures to generate a meaningful/lasting bid, even as U.S. Tsys firm. That leaves YM unch. & XM +0.5 at typing. A reminder that NSW COVID cases ticked back from yesterday's joint-record levels, but still printed above the 200 mark. Elsewhere, SE Queensland will see the lockdown in play there extended until 16:00 Sunday. Local lower tier data releases had no impact on the space. Looking ahead, tomorrow's RBA monetary policy decision dominates the local docket, with most looking for the central bank to renege on its tapering move (which wasn't scheduled to get underway until September).