ACGBs Catch Up With Global Bond Rout

Aussie bonds got hammered on return from holidays, playing catch-up with sharp sell-off in U.S. Tsys inspired by aggressive hawkish Fed repricing.

• Cash ACGB curve bear flattened, with yields last seen 21.0-37.0bp higher, as the rate-sensitive 3-Year debt leads losses. 10-Year yield showed above 4% for the first time in eight years before trimming gains.
• Cheapening impetus crept into Aussie bond futures. YM last -25.6 & XM -21.4, with bills running 36-42 ticks lower through the reds.
• The AOFM sold A$100mn of 20 Sep '30 inflation-indexed bond, drawing bid/cover ratio of 1.76x.
• Domestic data failed to move the space, as NAB Business Conditions rose to a 10-month high in May and CBA household spending grew 2.9% M/M over the same period.