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10s Lag Vs. U.S.

AUSSIE BONDS

The space continues to underperform U.S. Tsys in the wake of the previously flagged domestic labour market report, the Aussie/U.S. 10-Year yield spread trades back out to 15bp, 6bp wider on the day. The shorter end of the curve remains underpinned in the wake of the recent RBA tweaks re: borrowing costs surrounding ACGBs purchased to enforce the 3-Year yield target, which allows smoother underpinning of RBA policy from a mechanical perspective, promoting steepening of the curve when bonds sell off. YM -0.5, XM -9.5.

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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