Free Trial
PIPELINE

High-Grade Issuers Return

OPTIONS

Expiries for Aug16 NY cut 1000ET (Source DTCC)

NATURAL GAS

Norwegian Gas Revenue Hits Record in July

OIL PRODUCTS

US Gasoline Consumption Down on the Week: GasBuddy

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access

Back From Lows

AUSSIE BONDS

Aussie bonds are off their session extremes, sitting little changed from levels witnessed before the release of the RBA’s quarterly SoMP. Meanwhile, U.S. Tsys stuck to a tight range, providing little by way of meaningful, lasting direction for ACGBs throughout the Sydney session (coiling ahead of NFP data due in the NY session).

  • Cash ACGBs run 3.0-5.5bp richer across the curve, with the belly leading the bid. YM and XM are +3.5 and +5.0, with the latter operating a little below ts overnight peaks after failing to meaningfully break above those levels earlier. Bills run 2 ticks cheaper to 2 ticks richer through the reds.
  • The latest round of ACGB Apr-2027 supply went smoothly, with the weighted average yield pricing 2.01bp through prevailing mids (per Yieldbroker estimates), while the cover ratio dipped to 3.14x - below the six-auction average at 4.13x, but not suggesting anything by way of a worrying decline in demand at that level. The easily digestible DV01 on offer (A$321K) and the fact that the line is borrowed via the RBA’s SLF (indicating wider demand for access to the line) likely aided the firm pricing.
  • The release of the RBA’s quarterly Statement on Monetary Policy (SoMP) did little to rock ACGBs, with the major economic forecasts having already been released in Tuesday’s post-meeting statement. The highlights surrounding the release remains the lifting of the RBA’s inflation outlook to 7.75% by Dec ’22, with unemployment expected to bottom out by end-’22 before rising to 4% by end ‘24. RBA assumptions surrounding the cash rate at year end were in line with the midpoint of analyst and market expectations, meaning there wasn’t any meaningful market reaction to that verse of the release.
  • The release of the weekly AOFM issuance slate similarly saw little reaction in the Aussie bond space, with three rounds of ACGBs on offer for a total of A$1.8bn.
  • Monday will see July foreign reserves headline the data docket, with A$300mn of ACGB Apr-2037 on offer via auction.
331 words

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.

Aussie bonds are off their session extremes, sitting little changed from levels witnessed before the release of the RBA’s quarterly SoMP. Meanwhile, U.S. Tsys stuck to a tight range, providing little by way of meaningful, lasting direction for ACGBs throughout the Sydney session (coiling ahead of NFP data due in the NY session).

  • Cash ACGBs run 3.0-5.5bp richer across the curve, with the belly leading the bid. YM and XM are +3.5 and +5.0, with the latter operating a little below ts overnight peaks after failing to meaningfully break above those levels earlier. Bills run 2 ticks cheaper to 2 ticks richer through the reds.
  • The latest round of ACGB Apr-2027 supply went smoothly, with the weighted average yield pricing 2.01bp through prevailing mids (per Yieldbroker estimates), while the cover ratio dipped to 3.14x - below the six-auction average at 4.13x, but not suggesting anything by way of a worrying decline in demand at that level. The easily digestible DV01 on offer (A$321K) and the fact that the line is borrowed via the RBA’s SLF (indicating wider demand for access to the line) likely aided the firm pricing.
  • The release of the RBA’s quarterly Statement on Monetary Policy (SoMP) did little to rock ACGBs, with the major economic forecasts having already been released in Tuesday’s post-meeting statement. The highlights surrounding the release remains the lifting of the RBA’s inflation outlook to 7.75% by Dec ’22, with unemployment expected to bottom out by end-’22 before rising to 4% by end ‘24. RBA assumptions surrounding the cash rate at year end were in line with the midpoint of analyst and market expectations, meaning there wasn’t any meaningful market reaction to that verse of the release.
  • The release of the weekly AOFM issuance slate similarly saw little reaction in the Aussie bond space, with three rounds of ACGBs on offer for a total of A$1.8bn.
  • Monday will see July foreign reserves headline the data docket, with A$300mn of ACGB Apr-2037 on offer via auction.