The overnight session was relatively subdued compared to the big swings we saw in markets through the European session yesterday. Core fixed income and the dollar have both drifted a little lower but remain well within yesterday's ranges.
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Distinction between calm or exhausted markets was hard to tell Friday, the second day after Russia invasion of Ukraine. Treasuries traded modestly weaker on an inside range as equities enjoyed strong gains in late trade - both a continuation from late Thursday trade as markets reassessed geopol-risk of the Ukraine invasion as well as the costs of punitive sanctions on Russia.
The downtrend in JGBs remains intact and last week’s gains are considered corrective. Recent lows reinforce a bearish theme and saw former support at the mid-January lows give way, opening levels not seen since mid-2018. Prices showed below the 150.00 handle, signalling scope for losses toward the key Fib of 149.65. For markets to stabilize, prices need to regroup toward the 151 handle, and show above 151.09.