The AOFM has released its weekly issuance slate:
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JGB futures have chipped away at overnight losses in early Tokyo trade, given the move away from Tuesday’s lows in U.S. Tsys (which JGB futures did not participate in during overnight dealing), leaving the contract -8 at typing. The major cash JGB benchmarks sit 1bp richer to 1bp cheaper across the curve, with nothing in the way of uniform flattening/steepening moves observed, as the 20- to 30-Year zone struggles ahead of today’s 30-Year JGB auction. Local headline flow remains light, leaving wider matters and setup for supply at the fore.
Slightly firmer than expected monthly CPI data (+7.3 Y/Y headline and +5.6% trimmed mean vs. BBG survey expectations of +7.2% & +5.5%, respectively), coupled with a firmer than expected retail sales print (+1.4% M/M vs. BBG median +0.6%, alongside a revision to the prior month with the surprise -0.2% print adjusted to +0.4%), applied some brief pressure to the ACGB space, which pared back from extremes relatively quickly.
AUD/USD hit a high of 0.6914 post the better than expected retail sales and CPI data for Nov. We have stabilised somewhat now, last just below 0.6910, but the A$ is outperforming against the rest of the G10. Yesterday's high in AUD/USD was close to 0.6930, while on Monday we topped out at 0.6950.