Back From Best Levels

The pullback in U.S. Tsy futures has allowed Aussie bond futures to move away from their early Sydney peak, with a lack of meaningful headline flow apparent thus far. That leaves YM +7.5 & XM +4.0 ahead of domestic labour market data at the bottom of the hour.

• The longer dated ACGB lines sit ~2.0bp richer on the day in cash trade.
• EFPs are little changed to a touch wider, with the 3-/10-Year box flattening.
• Bills run -3 to +12 through the reds, pivoting around IRZ2, with the weakness in the front end likely aided by an uptick in the 3-month BBSW fixing (+1.86bp).
• The latest round of Melbourne Institute inflation expectations data saw another uptick, with the RBA already attuned to “inflation psychology.”