KRW: USD/KRW Supported On Dips, Close To Top End Of Downward Trend Channel**

TYM5 has traded lower within a range of 110-15+ to 110-19+during the Asia-Pacific session. It last changed hands at 110-19, down 0-07 from the previous close.

• The US 2-year yield is higher, dealing around 3.91%, up 0.02 from its close.
• The US 10-year yield is higher, dealing around 4.40%, up 0.02 from its close.
• (Bloomberg) -- “Hedge funds aggressively added to net short positioning in 10-year note futures, while asset managers boosted longs in the sector in the week up to May 6, CFTC data shows.”
• Several regional small and medium-sized banks in China have lowered deposit interest rates in a bid to further reduce funding costs, according to Securities Daily. Following the adjustment, interest rates on certain banks’ three- and five-year medium- to long-term deposits have fallen below 2%. Analysts anticipate this downward trend will persist, citing ongoing pressure from narrowing interest rate spreads, the report said.
• Yields have all moved higher this morning as risk bounces on US-China officials citing 'substantial progress' made from weekend trade talks held in Switzerland.
• The 10-year Yield range seems to be 4.10% - 4.5%, price has bounced nicely off the 4.25/30 support, target back towards the top end of the range 4.45/50%.
• Data/Events :  US CPI Tomorrow

At the Tokyo lunch break, JGB futures are weaker, -43 compared to the settlement levels, hovering just session lows.

• Outside of the previously outlined trade balance data, there hasn't been much by way of domestic drivers to flag.
• Today’s heavy session aligns with US tsys, which are trading 2-3bps cheaper in today's Asia-Pac session as risk bounces on US-China officials citing 'substantial progress' made from weekend trade talks held in Switzerland. US Treasury Secretary Bessent said there had been 'substantial progress' in the two days of talks with China and that further details would be shared today.
• “Japan won’t accept any initial trade agreement with the US that excludes auto tariffs, according to Prime Minister Shigeru Ishiba. Ishiba on Monday made his stance clear when asked in parliament about the possibility that Washington might urge Tokyo to strike a provisional agreement that doesn’t address US tariffs on car imports.” (per BBG)
• Cash JGBs are 2-8bps cheaper across benchmarks, with a steepening bias. The benchmark 10-year yield is 4bps higher at 1.409% versus the cycle high of 1.596%.
• Swap rates are 2-6bps higher, with swap spreads mixed.