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A Touch Firmer & Flatter, Back From Extremes

AUSSIE BONDS

Aussie bonds continue to trade to the beat of the wider macro drum, with a lack of idiosyncratic drivers evident once again on Thursday.

  • In his latest pre-election address, Australian PM Morrison noted that sizeable pay growth may fan the inflationary flames further, despite various unions and business bodies calling for such a move in recent days (Morrison’s ruling coalition still trails Labor in the polls ahead of the May 21 election).
  • The previously outlined COVID case-related headlines surrounding China, and to a lesser extent, North Korea, in addition to the Sunac bond payment worries, allowed futures to move to best levels of the session during the Sydney morning, before the move pared back a little as wider risk appetite recovered a little.
  • A very modest moderation in domestic consumer inflation expectations (to a still lofty +5.0% in Y/Y trimmed mean terms) had no impact on the space.
  • YM is dealing +4.0, with XM +5.5, which much of the overnight/early Sydney flattening unwound.
  • 10+-Year cash ACGB trade has seen a fairly parallel 5.5-6.5bp of richening.
  • A$1.0bn of ACGB May-32 supply, the release of the weekly AOFM issuance slate and panel participation by RBA Deputy Governor Bullock at the Regulators 2022 (FINSIA) headline the local docket on Friday.
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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