Bear Flattening On Wider Impetus

The overnight, central bank rhetoric-driven moves in core global FI markets promoted bear flattening of the Aussie bond futures curve, although both YM and XM managed to finish post-Sydney dealing off of their respective overnight lows, with U.S. Tsys operating off of worst levels.

• The major contracts operate marginally below late overnight levels shortly after the re-open, with YM -7.5 and XM -4.5.
• Bills sit 5-11 ticks lower through the reds, with the front end of the IR strip leading the way lower, once again aided by hawkish global central bank rhetoric in post-Sydney dealing.
• Flash PMI data and the release of the weekly AOFM issuance slate headline the domestic docket on Friday, although participants will likely focus on headlines and wider macro flows when it comes to drivers of market activity.