ACGBs Firm In Sync With Tsys, Debt Supply Smoothly Digested

YM trades +2.5 & XM +7.0 at typing, with the 10-year future taking out the earlier session high as a result of its latest upswing, which occurred in tandem with a push higher in T-Notes. Cash curve has bull flattened, yields sit 0.1-7.5bp lower. Bills last seen unch. to +1 tick through the reds.

• The initial bid in ACGBs may have been related to demand for NZGBs, as participants continued to trim RBNZ tightening bets. Later, the RBNZ missed its LSAP buying goal as it purchased just NZ$152mn NZGBs vs. target of NZ$220mn.
• The supply of ACGB 1.25% 21 May '32 has been smoothly digested, with the bid/cover ratio rising to 4.22x from 2.58x seen at the previous auction of this bond. Today's offering was light by historical standards, as the AOFM sold just A$1.2bn of the bond, which represents the smallest auction of ACGB 1.25% 21 May '32 since Jun 5.
• The RBA offered to buy A$1.0bn of semi-gov't bonds with maturities of Mar '25 to May '32, excluding TASCORP Jan '32, TCV Nov '25, TCV Oct '29 and WATC Oct '30.
• Tsy Sec Kennedy spoke to a parliamentary panel, noting that as many as 150k jobs can be lost following the expiry of the JobKeeper wage subsidy scheme. Nonetheless, the Tsy thought it's "appropriate for the programme to end."
• Australian flash Markit PMIs improved across the board, showing a faster pace of expansion in all sectors, with accompanying commentary noting that "the loosening of coronavirus disease 2019 (COVID-19) restrictions led to a surge in new work received by Australian companies, which in turn underpinned a stronger expansion in business activity."
• Preliminary trade report from ABS suggested that trade surplus registered at A$8.100bn in Feb, with the 2% rise in exports driven primarily by non-ferrous metals, meat, petroleum, coal, cereals and textile fibres.
• RBA's Harper told the WSJ that Australian economic recovery is "sharper than even the most optimistic forecasts."
• RBA's Debelle & Bullock will appear before the Economics Legislation Committee today at 09:00 GMT/20:00 AEDT.