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Needle Still Points North


Bearish Correction Still In Play

AUSSIE BONDS: Aussie Bonds edged lower alongside Tsys as it became apparent that
US President Trump is set to meet with North Korean leader Kim in the coming
weeks. We also learnt that Kim has promised to halt nuclear tests.
- 3-Year futures last trade at 97.875 (-2.0 ticks), while 10-Year futures last
trade at 97.2125 (+0.25 ticks).
- The domestic 3-/10-Year yield differential last trades at 69.50bp (-1.0bp),
while the AU/US 10-Year yield differential trades at -7.5bp (-0.5bp). - BBSW
fixed higher again today which has continued to add pressure to the front end of
the bill strip, while the dip in bonds has also pressured the short end as we
trade 2-3 ticks lower across the white & red contracts.
- A solid auction of the 3.25% 21 April 2029 bond saw the cover ratio edge
higher (the line moves towards becoming a 10-Year basket constituent) , while
more bidders were successful this time out as the size of the auction ticked up
from the most recent offering.
- The 3-Year roll has been active this morning, with selling pressure noted by
MNI London Bureau | +44 0203-865-3809 |