A Touch Flatter, Lowe Address Eyed

The flattening witnessed on the U.S. Tsy curve in post-Sydney dealing resulted in some bear flattening of futures overnight, leaving YM -4.0 & XM -2.0 shortly after Tuesday’s open, while wider cash ACGB trade sees the major benchmarks running 4bp cheaper to unchanged vs. closing levels, with 3s leading the cheapening.

• EFPs are essentially unchanged on the day.
• The bill strip has bear steepened a touch, with the contracts running 1-5 cheaper through the reds as RBA dated OIS pricing oscillates within the boundaries set in recent sessions.
• A$150mn of ACGB Sep-30 I/L bonds will be sold by the AOFM today, with the weekly ANZ-Roy Morgan consumer confidence data also slated. There isn’t much in the way of tier 1 macro risk events to note ahead of RBA Governor Lowe’s dinner time address, which will be on the topic of “Price Stability, the Supply Side and Prosperity.”