A Whirlwind Friday

Aussie bonds saw a light boost in early trade, before the broader bid in core FI came into play, with some fresh interest in establishing cross-market AUD longs seemingly apparent after the open, although a repeat A$3.0bn round of unscheduled RBA purchases covering ACGB Apr '23 & Apr '24 did little for the space, with some weakness kicking in, before U.S. Tsys led core FI away from Asia session cheaps, leaving Aussie bond market participants to take cues from broader price action for much of the session.

• Fresh weakness then showed up into the close leaving YM -6.5 and -18.0 at the bell, with month-end extension flows somewhat insignificant owing to both recent issuance dynamics and the magnitude of the recent sell off (as some sell side names flagged earlier this week).
• We should also highlight that the AOFM has yet again pulled back re: weekly ACGB issuance, with the recent volatility meaning that it will only offer A$1.0bn of ACGB Jun '31 at auction next week.
• The recent bond market volatility has stirred keen interest in next week's RBA decision, after it seemed set to be a non-event just a few short weeks ago.