ACGB Supply Matters In Focus

Cash Tsys saw some light bull flattening as some pointed to cross market demand for the space as Aussie bonds weakened. T-Notes held a tight 0-03 range, last unchanged at 139-14+.

• Cash JGBs richened at the margins ahead of the 4-day weekend in Tokyo, while the swap space saw some twist steepening, and generally widened vs. JGBS. The latest round of 1-5 Year JGB liquidity enhancement supply was seemingly fairly routine, despite some expectations for heightened demand owing to recent collateral matters. Futures consolidated above 152.00, and last sit 6 ticks higher on the day.
• Over in Australia the ACGB announced that next week will see the syndication of the new ACGB Sep '26 line, with the resulting pressure more than outweighing a firm round of ACGB Nov '24 supply (which saw participants clamour for exposure to the line, owing to the rolldown opportunity facilitated by the RBA's 3-Year yield target). YM -2.5, XM -3.5, with the cash space also bear steepening.