ACGB Nov-33 Syndication & Inflation Pressures Eyed

YM is now -3.0, while XM is -8.5, with the latter hovering 1.0 above worst levels of the session. The early twist steepening impetus moved into a state of bear steepening, with longer dated cash ACGBs a touch over 9.0bp cheaper on the day. EFPs are marginally narrower, with the 3-/10-Year EFP box flattening. Bills are flat to 2 ticks richer through the reds.

• Wider core global fixed income weakness (read U.S. Tsys) and pressure surrounding the syndication of the new ACGB Nov-33 (which saw A$15.0bn priced vs. an orderbook of A$37.5bn) allowed the ACGB curve to steepen, with hedging flows surrounding the pricing of the syndication pressuring XM to fresh cycle lows
• An early bid was seen in YM & the IR strip, with some pointing to the degree of RBA tightening already priced into the curve as a potential area of support, in addition to the twist steepening seen in the U.S. Tsy space on Monday.
• YM and the IR strip then eased back from best levels with some pointing to the inflation components of the latest NAB business survey, with the summary on that matter noting that “the continued escalation in price growth over recent months suggests a strong Q1 CPI reading is likely when released later in the month and based on the monthly trend could well continue to build in Q2.”