Australian yields are set to at least maintain their wide premium over developed-market peers as investors price in a sustained surge in the value of the nation’s commodity exports. Gold’s rapid rally has been a particular help, but the strong advance for base metals is probably a more important signal that Australia’s economic rebound may extend.

JGB traders will be hoping that Governor Ueda springs a surprise today and hints the BOJ will increase purchases of super long bonds to stabilize the yield curve, especially with the risks imposed by Takaichi’s stimulus plans.

US Treasuries have steadied after this week’s sharp selloff, but the pause looks more like consolidation following a bearish range break further out the curve.

On 9th Nov, we had given a sell Reco on 10yr UST when yields were at 4.08. Our target was 4.30. Yest high was 4.297 so we close this reco for now.

Today’s sale of traditionally unloved 20-year JGBs in many ways couldn’t come at a tougher time. Long end JGB yields are at multi year highs. Amid the impending elections, today's auction might find it difficult to lure buyers even at such elevated yields.

Corporate bond supply in this holiday shortened week is likely to be almost half of last week's volume of $60 BN. Spreads are attractive for potential borrowers having tightened across the spectrum last week.