A Heavy A$ Supply Slate Seen

The uptick in e-minis provided some light pressure to the space to start the week, although the space was unwilling to really stretch its legs outside of the SYCOM ranges, even before a softer than expected Chinese GDP reading really limited the downside momentum. YM -0.5, XM -3.0, with the cash ACGB curve steeper. The prospect of relatively imminent RBA easing continues to cushion AU 10s vs. their U.S. Tsy counterpart, allowing the AU/U.S. 10-Year yield spread to settle just below 0bp early this week.

• Weekend news flow saw a slight pullback in the COVID restrictions imposed on the state of Victoria, although state Premier Andrews remains under pressure to do more. We also saw NSW relax some restrictions on Monday. Elsewhere on the COVID front, the Aus-NZ travel bubble experienced some early hiccups owing to onward journeys from a pocket of travellers.
• A flurry of A$ semi and corporate issuance was noted at the start of the new week, headlined by NSW launching a new green Nov '30 line.
• Bills sit unchanged to -2 through the reds.
• The minutes from the RBA's most recent meeting headline on locally on Tuesday, although the more up to date address from RBA Governor Lowe has likely watered down the market impact of the release.